The most common questions I get are from people who wonder what a mortgage short sale will do to their credit, and whether they can do a mortgage short sale in such a way that they can stay in their house. Finally, people have mortgage short sale questions having to do with whether they can buy another house after doing one.

I'll attempt to answer your foreclosure short sale questions now.

You can do a short sale in such a way as to preserve your credit. I wrote about foreclosure deed in lieu credit reports already and a lot of that information applies to short sales too. You may have lates on your record already. You can attempt to negotiate with the lender so that they remove these lates. They will say they can't but they can. The lender also can report you as Foreclosure, or Paid Settlement, or Paid Satisfactory, or Unrated.

You want Paid Settlement if possible, and Unrated is even better. It is not likely they will do Paid Satisfactory although you can ask. I would insist on Unrated if possible. Unrated is a credit status reporting that few people are aware of. Also known by the code R0, it is not negative at all. And even Paid Settlement is not terrible. It is a small ding compared to bankrtupcy, or foreclosure, which lower your credit score a lot.

As for the second question, you can not expect to stay in your house after you do a short sale. Your short sale will get a lot of scrutiny. The lender will not allow you to sell to your friend and then have your friend transfer the property to you. This is a fraudulent situation and will get you into a huge pile of trouble if you try this. The short sale has to be done so as to expose your house to the market. And then the best offers are the ones you accept.

At that point the lender is getting the entire amount left over after the buyer puts in her money and closing costs and so forth are paid. So the lender is not going to look kindly towards any funny business. A short sale gets you out from under and it is wonderful if you can do one. Don't push it by trying to stay in your house. That doesn't work.

Okay, the last question as to whether you can do a short sale and buy another house — yes you can. You may not be able to qualify for a new loan immediately. Especially in today's very difficult credit environment. But there are lots of ways to buy a house with little or no money down, no qualifying, and bad credit.

There are a lot of other questions you will have about doing a mortgage short sale. I want you to instantly subscribe to my high quality mailing list. You'll get insider tips on short sales, stopping foreclosure, avoiding bankruptcy and actually improving your credit. I have a 25 page extraordinary report that I'll give you instant free access to and a lot of other goodies, including access to upcoming telephone seminars. Privacy assured and you can leave my list anytime.