Credit damaged due to foreclosure

[FlaRiptide]

I purchased a home from a relative in April 2007. The house was very much not within my means, yet the realtive had promised to greatly paydown the mortgage as a wedding gift once he had cashflow. This never occured and the relative has recently passed away.

I could no longer afford to remain in the home and stopped paying the mortage in April 2008. I moved back into my previous home.

The 1st mortgage holder, IndyMac, filed foreclosure on Oct. 2, 2008. The complaint includes "to enforce lost loan documents". No other activity has occured.

Finally my realtor has someone interested in the short-sale, From $435,000 my purchase cost down to a shortsale price of $179,000. I assume the mortgage company will accept. If not, I go bankrupt and we both lose.

My FICO score prior to all this mess was 780. Due to the foreclosure it has obviously been damaged.

Part of the short-sale procedure is forgiveness of the unpaid portion of the outstanding debt. My question is, if I request IndyMac to also wipe the foreclosure off my credit report and they agree to this, is it possible?

Will the Credit companies, Equifax, etc, remove the foreclosure info by request of the mortgage company? Or, might I have to pursue this fix by other means.

 

[Michael Wechsler]

From my understanding, no, it's not possible to simply wipe the foreclosure off your credit report due to a short sale. There is no "fix" and the word "forgiveness" doesn't mean you just walk away from a mortgage you couldn't afford with no consequences. Your very good fortune in being allowed to walk away from your obligation at a loss to the bank is why our country may collapse. There are repercussions for this and that is that you are now determined to be a larger credit risk than anyone else who hasn't defaulted on their mortgage and that is what a credit report is supposed to provide - accuracy.