Short Sale Vs. Foreclosure Part 3 of 4

A short sale has many benefits vs. a foreclosure. Some of these are highlighted below. President Obama and his team are pushing banks to approve short sales this year to stem the tide of foreclosures.

FORECLOSURE

Credit Score

Score may be lowered anywhere from 250 to over 300 points. Typically will affect scores for over 3 years.

Credit History

Foreclosure will remain as public record on your credit history for 10 years or more.


SHORT SALE

Credit Score

Only late payments 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 being made. A short sale’s effect can be as brief as 12-18 months.

Credit History

Short sale is not reported on a credit history. There is no specific reporting item for “short sale”. The loan is typically reported “paid in full, settled”

Know Your Options & The Hidden Consequences of Foreclosure
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