Short sellers may take a big hit on their credit scores

Source: Kenneth R. Harney - The Washington Post

With generous new guidelines from Fannie Mae and Freddie Mac likely to stimulate large numbers of short sales by underwater homeowners, what impact can these sellers expect to see on their credit scores? It’s a crucial question because short sales typically cause FICO scores to plummet, sometimes by 150 points or more. This complicates sellers’ credit capabilities for years and makes additional borrowings — whether for auto loans, credit cards or new mortgages — tougher and more expensive.

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