Relocate to Wisconsin : The Credit Counselor told me to choose foreclosure said the Would be Seller

The Credit Counselor told me to choose foreclosure said the Would be Seller

Oh golly gee whiz....we consulted with a....oh surprise...divorcing couple about selling their property.  It was under water through no fault of their own...a nice property but just not commanding the mortgage balance upside down houseowed.  Both had excellent jobs and retirement accounts that dividing the deficiency would have paid off the mortgage and each would be free to go on their way and begin a new life as a single person.  They did not qualify for a short sale....and thus our advice at the request of their attorneys.

    Seek the highest and best...which one member of the couple determined was a credit counselor....sounds logical....and adviccredit counselinge you probably pay for always seems like the best thing to do.

    The "Counselor" told the homeowner by all means...choose foreclosure....Pardon me ?  What kind of advice is that ? score was not great so what if it got down payment now..therefore no immediate threat of not being able to buy another home.

   We knew the credit score and finances....within a year with some effort she could get on top of both situations...begin to re-build her life...and the one really HUGE to our minds...detail that the credit counselor "forgot"...there is no guaranty that the lender....since either could afford the payment...will not pursue the deficiency. The deficiency can include the difference between what the ultimately foreclosed property nets the lender and what was house on moneyowed ...Holy Moley....that is a chunk of change...and a foreclosure that will take a while to recover from as well !

    Credit counselors don't need "credentials" ...licenses...just the ability to charge for their finforeclosureancial advice....Yicks !

    Choose foreclosure...what a choice !  Wait go to get a wish you could buy but cannot...interest rates for anything the "Credit Counselor" and ask the best way to cope with all this additional debt.   So now.....besides ruining credit and adding foreclosure....keep looking over your shoulder to see if the lender is pursuing the deficiency...Golllly !

     You can't save everyone from their choices of "highest and best"....all you can do ....and we feel MUST do is give them ALL the information they need to make the best possible decison.  IF these are the kind of Realtors you feel you want to represent you...Call the Hansons...we are honored to be of service.

Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS

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Comment balloon 45 commentsSally K. & David L. Hanson • November 22 2016 08:13PM


Agreeded... Foreclosure  is the LAST resort, seems like the credit counselor was missing a big piece of the puzzle or lazy.  You had a bad situation in short sale was not an option, so highest and best  made the best sense.  I think I would try and explain why there is one other option available be fore  foreclosure.  Maybe the couple will see the light. Good Luck

Posted by Chuck Mixon, Cutler Bay Specialist, GRI, CDPE, BPOR (The Keyes Company) over 1 year ago

Sally and David, wow!  This is the single most well-deserved rant I've ever seen on ActiveRain!  

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 1 year ago

Oh I can not stand when "credit counselors" talk but do not know what they are talking about... I had an attorney they advised him to do a Short Sale..... I told him he can afford to divorce and make the payments and hold on to the house... he listened to me when he bought it was worth $610k and now since the market improved in our area it is worth around $950k and he is glad he listened to me not the "credit advisor"....

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 1 year ago

There will never be a shortage of bad advice.

Have a great week and an outstanding Thanksgiving.

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) over 1 year ago

Sally and David, that is really a shame that the credit counselor gave that kind of advice.

Posted by Sybil Campbell, REALTOR® ABR, SFR, SRES Williamsburg, Virginia (Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia) over 1 year ago

I have heard peopel speak of foreclosure and bankruptcy as no big deal. It is a big deal and peopleneed to protect their credit.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) over 1 year ago

WOW!  I'm with Roy Kelley - bad advice is rampant these days!  Just WOW!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods ( | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) over 1 year ago

It is strange and surprising to hear such bad advice given freely.

Posted by Michelle Carr-Crowe-Top 1% Diamond Certified Real Estate Team Sells Cupertino San Jose Homes-Just Call 408-252-8900, Family Helping Families Buy & Sell Homes 40+ Years (Get Results Team...Just Call (408) 252-8900!) over 1 year ago

Where there is a will there's a way. You just proved this to a bunch of us

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 1 year ago

Sally K. & David L. Hanson - I always wonder why these professionals give them the advice that is going to hurt them - in long run as well as in short run...

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) over 1 year ago

It's often a character issue and I personally don't care for the choice.   Giving up on a commitment.  Poor me.  

Posted by Derrick Guevremont, Rochester MN Homes for Sale (Counselor Realty of Rochester) over 1 year ago

Good morning Sally and David.  All I can do is shake my head and wonder where these so called experts get their information from.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 1 year ago

It is amazing to me all the bad advice that surrounds consumers every day. Choices are hard because figuring out the details are difficult. Who do you trust??

Posted by Janis Borgueta, LIC RE Salesperson (Key Properties of the Hudson Valley ) over 1 year ago

Good morning Sally K. & David L. Hanson ,

Wow..not this is some bad advice! There are choices but that does appear to be the most viable one.

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) over 1 year ago

Great advice!!!

You can't save everyone from their choices of "highest and best"....all you can do ....and we feel MUST do is give them ALL the information they need to make the best possible decison.

Posted by Sham Reddy, CRS (H E R Realty, Dayton, OH) over 1 year ago

It almost sounds like the other agent just did not want to help these folks and that is, in my opinion, not putting the prinispals' needs first and foremost ahead of everything else.

Posted by Sandy Padula and Norm Padula, JD, GRI, Presence, Persistence & Perseverance (Realty National) over 1 year ago

Great post. I am with Roy, Debe and the others that refer to the never ending supply of bad advice.  This is one area where the need for a "quick fix" usually wins over reason and the advice of these "counselors" is such a shame.  Usually, people that seek help like this are already stressed, scared and confused and in walks the "hero"................TA DAH! It's shameful!

Posted by Chris Lima, Local or Global-Allow me to open doors for you. (Atlantic Shores Realty Expertise) over 1 year ago

Drives me crazy when the so called experts they are sent to have as much knowledge as you can find in a bag of chips Sally K. & David L. Hanson 

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) over 1 year ago

Folks are always looking for an "easy way out" and these "credit counselors" make it all sound like sunshine and bubbles.  Until that deficiency notice arrives....

Posted by Jeanne Gregory, The most important home I sell is YOURS! (RE/MAX Southwest) over 1 year ago

It is amazing that credit counselors do not have to be licensed  They have access to people's financial information, make lift altering recommendations, and may not (as is this case). 

Posted by Shirley Coomer, Realtor, Keller Williams Realty, Phoenix Az (Keller Williams Realty Sonoran Living) over 1 year ago

If the consumer could only realize that Real Estate Agents often specialize in areas that can mean significant benefit for them.

You specialize in helping Divorcing couples. This means you have suggestions that could save them money, frustration and less damage to their credit.

Lawyers and Credit Counselors are not always up to date on solutions.

Posted by John Wiley, Lee County, FL Real Estate GRI, SRES,GREEN,PSA (Right Move Real Estate Group- EXP Realty) over 1 year ago

Hi Sally and David --  just when you think you have heard it all.....

Posted by Michael Jacobs, Los Angeles Pasadena Area Real Estate 818.516.4393 (Coldwell Banker Residential Brokerage) over 1 year ago

Hi Sally and Davis: Adding more to the bucket of bad advice from people you pay for advice, how about the lawyers who don't release the lien after a Chapter 7, leaving the clients on the hook to still have to do a short sale to get rid of it? Or worse, the lawyers who suggest a BK when the house is the ONLY liability and could so easily be disposed of without charge to the owners (and in addition to a cash payment such as HAFA offers) through a short sale?

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) over 1 year ago

Other advice: You are short by $50000 - you both owe $25000. One person can stay in the house and rent the rooms or rent the house. The work of keeping the mortgage and renting doesn't have a cash value. The party who moves out will pay down the loan by $25000. The party who stays trys to do a HARP refinance AND pay down the loan by $25000. Now the house is cash positie by 4% - Change the title to party who stays, they can decide to rent/ get roomates/ or try and sell. Unfortunately both parties remain on the mortgage, but a court order in your divorce decree stating the terms of this agreement may help the party who leaves to get financing in the future in the event the party who stays flubs the dub. The party who stays has two years to refinance the existing loan into their name or payoff by sale. If the party who stays does not refinance they owe the party who leaves an additional $50000.   Or just sell and pay the loan down

Posted by Caroline Gerardo, C. G. Barbeau the Loan Lady (Eagle Home Mortgage, LENNAR HOMES Home Loans) over 1 year ago

Sadly there is a lot of bad advice out there, and from people who don't care or are not ina ny way impacted by the bad advice they give, but it seems like there is some good advice from your fellow Rainers here!

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) over 1 year ago

Foreclosure is sometimes the best option - in this case, that doesn't sound right, and that deficiency is something people rarely consider.  Always tough to see folks in predicaments like this.

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) over 1 year ago

Sometimes an opinion can kill and at the least harm you....

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) over 1 year ago

In Hawaii the lender can proceed with a deficiency judgment and some do.

Posted by Julie A. Black, CLHMS, CRS, GRI, Realtor, Broker (KAUAI DREAMS REALTY Kauai Real Property Specialist) over 1 year ago

Sally and David credit councilors can create more problems then they solve.  Credit councilors tend to be very short sighted and not look to the impact their advice can have on the future.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 1 year ago

That foreclosure route probably sounds like a good out in the short run. But long-term, I imagine it will not work out well for them.

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) over 1 year ago

It is the old issue of "how do you know if the advice you are getting is really the best advice for you?"

Where did this counselor come from? Was s/he part of a recognized professional


Posted by Thomas McCombs (Century 21 HomeStar) over 1 year ago

The banks and how they handle these situations never cease to amaze me with their stupidity. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) over 1 year ago

I was wondering the same thing as Thomas McCombs! Where did that counselor get their licenses?

Posted by Sussie Sutton, UTR TEXAS Realtors - Rep for buyers and sellers. (UTR Texas Realtors) over 1 year ago

You can't fix stupid...I learned a long time ago that just because someone is licensed, it doesn't guarantee they know what they are doing. I once had a CPA tell me that if one of their clients has a lot of credit card debt or is underwater on their mortgage, they advise them to file bankruptcy! Lost a good client because the person followed that advice!

As Thomas McCombs mentioned, I am also curious about where they found this "credit counselor" and if that person was associated with a nationally accredited credit counseling organization. There are legitimate credit counseling companies, the best are 501(c)3 (non-profit) and counselors must go through training and pass the certification exam. The NFCC is probably the oldest and best known.


Posted by Diana Zaccaro, Your Brevard County, Florida coastal connection! (Tropical Realty Beachside power by eXp) over 1 year ago

Congratulations on your featured article. We are looking forward to the next one.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) over 1 year ago

Doing what you think helps but oh oh, should not have... lots of that happens in life, in real estate Sally K. & David L. Hanson !

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) over 1 year ago

You don't need a license to be a credit counselor, but you need a license to do balloon art or cut someone's hair. What a crazy system! 

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) over 1 year ago

Without knowing all the details and the time horizons of each spouse's financial stability, cash flow, and recovery plan, it wouldn't be prudent to reach any conclusions, yet, if the credit counselor secured the necessary details and information, recommending foreclosure might very well be the best solution. 

I would recommend securing another opinion before taking action, however, I've found that divorcing couples rarely cooperate to mitigate solutions to ease any financial pain, don't you? 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) over 1 year ago

You would be better off seeking the advice of an attorney for bankruptcy becasue that would be the next step, so why not just pass go?

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 1 year ago

I am just wondering how one can become a credit counselor. I am not looking to become one

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) over 1 year ago

I'm saying a short was the way to go unless each one could afford the mort on their own.

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) over 1 year ago

It is amazing that the people that are sought or advise give so with no professional training and no one to hold them accountable.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 1 year ago

Sally and David, I included this post in today's Last Week's Favorites.  Hope you enjoy the rest of your weekend!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 1 year ago

Holy Moly!  I hope they seek the advice of someone else, a second opinion, before making that drastic decision.   Sometimes you just shake your head. Good thing they have you on their side!

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) over 1 year ago

Oh, good LORD. This kind of thing just makes me want to go kicking and screaming to someone and say, "This isn't RIGHT! hOW DARE thEy??" (I did the caps on purpose, just to show you how crazy so-called "experts" can be...). One can only hope that they had enough sense (she) to follow your recommendations. 

Posted by Gayle Rich-Boxman Fishhawk Lake Real Estate, "Your Local Expert!" 503-755-2905 (John L Scott Market Center) over 1 year ago