Short Sale vs Foreclosure Homeowner Consequences

If you foreclose on a home your score may be lowered anywhere from 250 to 300 points , and your score can be affected for over 3 years, if you do a short sale only late payments on your mortgage will show and after the sale the mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points, if all other payments are made on time, and a short sale's effect on credit can be as brief as 12 to 18 months. After a short sale you can typically qualify for a new home loan after 2 years, whereas a foreclosure can prevent you from getting a loan for 5 years.

If you have a security clearance a foreclosure may affect this whereas a short does not challenge most security clearances. In a foreclosure the bank has a certain amount of time to come after you to sue for deficiency, whereas in a short sale the right for them to come after you can be waived if handled properly. A foreclosure may also challenge employment if your employer or prospective employer pulls a credit report, whereas a short sale is not reported on credit and not a challenge to employment.

We have helped many homeowners through the short sale process and were able to get the right of the banks to come after them for the deficiency waived. Please contact us for a confidential consultation.