Short Sale or Foreclosure? Homeowner Consequences
During these difficult economic times several people are having problems making their mortgage payments and are considering letting the bank take over their home in a foreclosure. Think again! You may be much better off selling your home through a Short Sale* by having a Realtor negotiate the sale price or settlement price with the bank. The advantages of a short sale are numerous and some of these are indicated in the chart below. Please contact us for further information on short sales.
|
Issue |
Foreclosure |
Short Sale |
| Fannie Mae Loan | Ineligible for 5 years | Ineligible for 2 years |
| Any Future Loan | Affects future rates for 7 years | No Impact |
| Credit Score | Lowered 250 to over 300 pts for 3 years | Lowered 50 pts for 1 - 1.5 years |
| Credit History | Public record for 10 years or more | Not reported |
| Security Clearances | Revoked with termination | Not affected |
| Current Employment | Challenge to employment | Not a challenge to employment |
| Future Employment | Challenge to employment | Not a challenge to employment |
| Deficiency Judgement | Bank has the right to purue | Bank can pursue but can be negotiated |
*Source: Distressed Properties Institute, LLC