Consequences - Foreclosure Vs. Short Sale
| Issue | Foreclosure | Short Sale |
| Future Home Loan | If primary residence, ineligible for 5 years. If secondary residence, ineligible for 7 years |
Ineligible for 2 years |
| Credit Score | Lowered 250 to over 300 points – typically for over 3 years | Only late payments are reported – after sale mortgage reported as paid or negotiated; result is lowered score by as little as 50 points for about 12 to 18 months |
| Credit History | Remains for at least 10 years | Not Reported |
| Security Clearance | Serious challenge | No effect |
| Deficiency judgment | Bank may pursue a deficiency judgment. Almost always results in a lower sales price, which means higher deficiency judgment | It is possible to convince lender not to pursue deficiency judgment. Home may be sold close to market value and usually results in a lower deficiency judgment |
| Employment Issues | Serious challenge for those in or seeking jobs in sensitive areas | Not a challenge |
Information deemed acurate but not guaranteed. HarderAndSmarter Realty is not engaged in the practice of law nor does it give legal or accounting advice.
Comments