Loss Mit Services

Only Three Companies in Connecticut Are Licensed to Negotiate Short Sales — Is Your Negotiator One of Them?

Posted on 23. Aug, 2026 by ctlms in Blog, Foreclosures, My Blog, News, Real Estate, Short Sale, foreclosure

I get this question from agents all the time: “Sean, does it really matter who negotiates the short sale? My seller found a company online.” The answer is... it matters more than almost anything else on the file, and here’s a number that should tell you why.

There are three companies in Connecticut licensed to negotiate a short sale on a homeowner’s behalf. Three. In the entire state.

And no, I’m not saying that from memory. I pulled the Department of Banking’s licensee list before writing this. One of the three is a national nonprofit housing counseling agency. Mine is one of the other two.

So what does the law actually say?

Simply put: in Connecticut, negotiating a short sale for a homeowner is “debt negotiation,” and debt negotiation requires a license.

That’s not my interpretation — it’s the plain text. Conn. Gen. Stat. Section 36a-671 defines “debt negotiation” to include “the negotiation of short sales of residential property.” Subsection (b) prohibits engaging in that business — or even offering to engage in it — without a license from the Department of Banking.

So then you ask, “if that’s true, how are there ‘short sale specialists’ advertising all over the place?” That is exactly the right question. The exemption list is short, and the Department of Banking publishes it right on its debt negotiator licensee page:

1. Attorneys practicing law in Connecticut. An attorney handling the negotiation as part of their law practice is exempt. Plenty of good short sales get done this way.

2. Banks and credit unions. They’re regulated separately.

3. Licensed debt adjusters. A different license, separately issued.

4. Nonprofits. Housing counseling agencies and the like.

Read that list again. Real estate brokers are not on it. A real estate license does not cover short sale negotiation in Connecticut. I hold broker licenses in three states, and none of them is the reason I’m allowed to negotiate your seller’s file — the debt negotiation license is.

“Okay, but it’s not my license on the line. Why do I care?”

Because the federal government thought of you too.

The MARS Rule — the FTC’s Mortgage Assistance Relief Services rule, now 12 CFR Part 1015 — has an assisting-and-facilitating provision at Section 1015.6. It reaches anyone who provides substantial assistance to a provider when they know, or consciously avoid knowing, that the provider is violating the rule. And the FTC’s own compliance guidance names supplying leads and referrals as an example of substantial assistance.

In plain English: the referral is the exposure. The agent who hands a homeowner to an unlicensed negotiator isn’t a bystander — they’re the one who made the introduction.

I’m not telling you who to work with, and I’m not going to name names. I’m telling you the list is public and the check takes ninety seconds on NMLS Consumer Access. If the negotiator isn’t licensed and doesn’t fit one of those four exemptions, ask them why not — then ask your broker or a real estate attorney what it means for you.

Why does the license exist in the first place?

Follow the incentives, because that’s what this law is really about. A homeowner in default is about the easiest person in the world to take advantage of. So the state wants somebody on the hook. The license comes with:

1. A surety bond. There’s money behind the license if something goes wrong.

2. An application and fitness review. The state looked at who’s running the company before saying yes.

3. A hard cap on fees charged to the homeowner — collectible only after all the contracted work is finished. Nobody licensed is taking an upfront fee from your seller.

What it buys you, the agent, is simpler: one settlement statement, with the same numbers going to every lienholder on the file. That’s how these files are supposed to run, and it’s the difference between a negotiation and the kind of two-sets-of-numbers arrangement that ends careers.

The takeaway

Before your seller signs anything with any short sale negotiator — me included — look them up. NMLS Consumer Access, ninety seconds. On the state’s list I appear as Accredited Home Services, LLC, which is the entity behind Loss Mit Services, license DN-828273 — the first debt negotiation license Connecticut issued after the requirement took effect in 2009.

And one more thing, so you hear it from me instead of at the closing table: lenders on these files sometimes require a commission reduction. That negotiation is part of the deal, not a surprise at the end.

If you’re sitting on a listing that smells like a short sale, send me the address and the approximate payoff. I’ll tell you within a day whether it’s worth pursuing.

As always, feel free to reach out to me with any questions.

Sean Wilder
Loss Mit Services
860-265-3727
CT Debt Negotiator NMLS #828273
Loss Mit Services is a dba of Accredited Home Services, LLC · CT Debt Negotiation License DN-828273

“Will I Ever Be Able to Buy Again?” — The Honest Answer After a Short Sale

Posted on 23. Aug, 2026 by ctlms in Blog, Foreclosures, My Blog, News, Real Estate, Short Sale, foreclosure

I get this question from sellers all the time: "If I do a short sale, will I ever be able to buy a house again?" And I get it from agents almost as often, usually phrased as "what do I tell them?"

Here's the honest answer, current as of August 2026. And I do mean current — most of the numbers floating around the short sale world are left over from the 2008 playbook, and repeating them today is how agents lose credibility at the listing table. I re-verified every figure below before writing this.

## The waiting periods, loan type by loan type

1. **Conventional (Fannie Mae): four years** after a short sale or deed-in-lieu, measured from the completion date. Two years if documented extenuating circumstances — a job loss, a medical event, a divorce — caused the default. After a foreclosure? Seven years, or three with extenuating circumstances plus added restrictions.

That four-versus-seven gap is the single most important number on this page. It's the difference a short sale actually makes.

2. **FHA: three years** after either a short sale or a foreclosure. But here's a detail almost nobody brings up: a borrower who was current on their mortgage and installment debt at the time of the short sale can potentially qualify for a new FHA loan with NO waiting period at all. Late payments in the preceding twelve months generally kill that exception — but it exists, and it's worth knowing before your seller misses a payment they didn't have to miss.

3. **VA: no published mandatory wait** after a short sale. Most lenders apply roughly two years as their own overlay, and a foreclosure carries a two-year VA wait. So which lender your buyer talks to matters — the overlay is the lender's rule, not the VA's.

## Now the part the short sale ads won't tell you

Two honesty notes, because this is where short sale marketing usually goes sideways.

**First, the credit hit.** A short sale that reports a deficiency balance scores much like a foreclosure. So then you ask, "then what's the point?" The point is the table above. The real advantage of a short sale isn't a softer credit hit — it's the faster road back to a mortgage. Four years instead of seven on conventional. Potentially zero instead of three on FHA. Anyone who tells a seller "a short sale won't hurt your credit" is setting them up, and probably setting you up too.

**Second, these are the seller's numbers to confirm.** Guidelines change. Every figure on this page comes straight from the current Fannie Mae Selling Guide and HUD Handbook 4000.1, and your buyer still needs to confirm their specific situation with a loan officer at application time. I re-verified these before posting, and you should too before you repeat them.

## Why this matters at the listing table

Follow the seller's thinking, because it explains a pattern you've probably seen. A homeowner who believes a short sale ends their homeownership forever has no reason to act. So they do nothing. And nothing usually means foreclosure — the outcome with the seven-year wait, the worse exit, and none of the control.

Showing that seller the actual road back, in writing, is often the conversation that gets a distressed listing moving. Not pressure. Not a pitch. A table with three loan types on it and a date they can circle on a calendar.

## The takeaway

If a seller asks you "will I ever buy again," the honest answer is: yes, and probably sooner than you think — four years conventional, three FHA (sometimes zero), about two VA — but confirm your specifics with a loan officer, because the guidelines move.

I've been negotiating short sales in Connecticut since 2007 — more than 2,000 closed files — and we have this conversation with sellers every week. If you're sitting with one weighing this decision, send me the address and the approximate payoff. I'll tell you within a day whether it's worth pursuing.

As always, feel free to reach out to me with any questions.

Sean Wilder
Loss Mit Services
860-265-3727
CT Debt Negotiator NMLS #828273
Loss Mit Services is a dba of Accredited Home Services, LLC · CT Debt Negotiation License DN-828273

Financial life after a short sale: what to expect (and how to rebuild)

Posted on 13. Jan, 2026 by ctlms in Blog, Foreclosures, My Blog, News, Real Estate, Short Sale, foreclosure

A short sale can feel like a financial “reset button.” You sell the home for less than what you owe, the lender agrees to accept the payoff (sometimes with conditions), and you avoid the full foreclosure process. But what happens after the closing? Does your credit bounce back? Can you buy again? Will you owe taxes?

Here’s a practical, real-world guide to life after a short sale—what typically changes, what doesn’t, and the steps that help you recover faster.

1) The first 90 days: expect the credit dip, then a roadmap forward

A short sale usually impacts your credit because the mortgage is not paid as originally agreed. The effect varies widely based on your credit profile going into the short sale:

• If you were current before the short sale: you may see a noticeable drop because it’s a new negative event on an otherwise healthy report.
• If you were already behind: the score damage may be less dramatic because late payments were already pulling the score down.

What matters most next is what you do immediately after closing:

• Make every payment on time (especially auto loans, cards, student loans)
• Keep credit card balances low
• Avoid applying for a bunch of new credit at once

Your credit doesn’t “heal” overnight—but with steady habits, many people see meaningful improvement within the first year.

2) Your credit report: what to check so you’re not rebuilding on bad data

After the short sale closes, your loan should update to something like:

• “Settled” / “Paid for less than full balance” / “Account closed”
• Possibly “Charge-off” in some cases (depends on timing and lender reporting)

Within 30–60 days of closing, pull your credit reports and look for:

• Incorrect late payments after the closing date
• A balance still showing as owed when it should be $0
• Duplicate mortgage tradelines (servicer transfer errors)
• A deficiency balance listed that contradicts your agreement

If something’s wrong, dispute it with documentation from your closing and approval letters. This is one of the most overlooked ways people lose months (or years) of progress.

3) Deficiency balance: will you still owe money?

This is the biggest “financial life after” variable.

In a short sale, the lender may:

1. Forgive the deficiency (best-case outcome)
2. Reserve the right to collect (sometimes later)
3. Negotiate a settlement or promissory note
4. Pursue collection (less common when properly negotiated, but possible)

The only thing that truly matters is what’s in writing:

• Short sale approval letter
• Settlement language
• Closing documents

If your approval letter says the deficiency is waived/forgiven, keep multiple copies forever (digital + printed). If it’s not waived, you may want a plan to settle the remaining amount—preferably in writing with clear terms.

4) Taxes: is forgiven debt treated like income?

Sometimes, forgiven mortgage debt can be considered taxable income. Other times, it isn’t—depending on federal rules, state rules, and your situation (like insolvency).

After the short sale, you may receive a tax form related to cancellation of debt (commonly a 1099-C). Don’t panic, and don’t say “I guess I owe taxes” without reviewing options. This is one of those moments where a CPA is worth it, because the difference can be thousands of dollars.

5) Renting after a short sale: how to get approved (even with bruised credit)

Many people rent for a period after a short sale, and that’s not failure—it’s strategy. Landlords and property managers often care about:

• Income stability
• Recent payment history (especially last 12 months)
• Past evictions (short sale is not an eviction)
• Cash reserves / ability to pay deposit

Tips that help approval:

• Have proof of income ready (pay stubs, bank statements)
• Offer a higher security deposit if feasible
• Provide a short explanation letter: job loss, medical issue, divorce, etc.
• Show a clean payment streak after the short sale

A short sale on your credit is less scary to landlords than a pattern of missed payments across everything.

6) Buying a home again: yes, it’s possible—and planning matters

A short sale doesn’t “ban” you from owning again. But there are typically waiting periods depending on the loan type and your overall credit profile. In many cases, the waiting period is shorter than foreclosure.

The key is to treat the next purchase like a project:

• Rebuild credit intentionally
• Save cash reserves
• Stabilize income
• Avoid major new debt (especially big car payments)
• Keep documentation that explains the hardship and shows recovery

If homeownership is your goal, a good loan officer can help you work backward from a target date and give you a step-by-step credit and savings plan.

7) Rebuilding smarter: a simple 12-month action plan

If you want a practical framework, here’s a clean starting plan:

Month 1–2

• Pull credit reports and fix errors
• Create a realistic budget you can stick to
• Build a small emergency fund ($500–$1,000)

Month 3–6

• Keep utilization low (ideally under 30%, even better under 10%)
• Add one “credit builder” tool if needed (secured card or credit-builder loan)
• Keep every payment on time—no exceptions

Month 7–12

• Grow emergency fund toward 3 months of expenses
• Pay down high-interest debt aggressively
• Avoid “quick fix” credit repair gimmicks
• If buying again is the goal, talk to a lender early to map out requirements

Consistency beats intensity. You don’t need a perfect plan—you need a plan you can follow.

The mental side: short sale isn’t a life sentence

A short sale can be emotionally draining. People often carry shame, even when the hardship was outside their control. But financially, this is a chapter—not your identity.

Many people come out of a short sale with:

• Less monthly stress
• A clearer budget
• Better financial habits
• A path back to owning (if they choose)

Your next year matters more than your last year.

Final thoughts

Financial life after a short sale is about stabilization and rebuild. The short sale itself is a major event, but what determines your future is what happens after the closing: clean reporting, smart budgeting, steady credit habits, and a plan for housing.

Sean Wilder

Loss Mit Services

860-265-3727