If my spouse isn’t on the mortgage, will they be affected by my short sale?

One of the most frequent questions I hear involves a contemplated short sale where only one spouse is on the loan and the couple is worried about how the other spouses credit will be affected. Common concerns are:

• Will both spouses income be considered during the short sale?
• Will the other spouse will suffer credit damage as a result of the short sale?
• Will the other spouse be denied for  a new mortgage due to the others short sale?

Thankfully the answer to all of the above is NO. If only one spouse is named on the mortgage, the other is neither responsible for it, or affected by a short sale of the mortgaged property. Having negotiated with hundreds of lienholders – I have never once been asked to provide income documentation for someone not named on the mortgage, nor have I seen negative credit reporting (for the non-short-selling spouse) as a result of a short sale. Furthermore, although I am not a lender and do not set lending guidelines, I have seen many instances of one spouse short selling a property, only to have the other spouse turn around and purchase a new property at the same time, or shortly thereafter.