How will a SHORT SALE or FORECLOSURE affect...

CREDIT SCORES:

Short Sale - Credit scores may be lowered as little as 50 points as long as all other payments have been made and will typically affect it for as long as 12-18 months. Mortgage will be reported as either Paid or Negotiated.
Foreclosure - Credit Scores may be lowered anywhere from 250 to over 300 points and will typically be affected for over 3 years.

CREDIT HISTORY:

Short Sale - A short sale will not appear on a person's credit history and is usually reported as Settled for Less than the Full Amount.
Foreclosure - Foreclosures will remain as public record on a person's credit history for 10 years or longer.

BUYING ANOTHER HOME:

Short Sale - A borrower on future mortgage applications will not be asked about a short sale and may be able to receive a reasonable interest rate in less than two years.
Foreclosure - A borrower on future mortgage applications will be asked if they have had their property foreclosed on within the last 7 years and will therefore affect their interest rates.

FUTURE LOANS:

Short Sale - An investor or homeowner who completes a successful short sale will be eligible for a Fannie Mae backed mortgage after 2 years or less.
Foreclosure - An investor or homeowner of a foreclosed property will be ineligible for a Fannie Mae backed mortgage for 7 years.

EMPLOYMENT OPPORTUNITIES & SECURITY CLEARANCE:

Short Sale - A short sale will not appear on a person's credit history and is usually reported as Settled for Less than the Full Amount and therefore should not challenge any employment opportunities or security clearances.
Foreclosure - A foreclosure on a person's credit report may be grounds for termination for some companies and could cancel a person's security clearance. A foreclosure on record may challenge future employment opportunities as well.

DEFICIENCY JUDGMENTS:

Short Sale - In California, purchase-money loans on a one- to four-unit residential dwelling are exempt from deficiency judgments. However, hard-money loans, such as a refinance or 2nd mortgage, may be subject to deficiency judgments.
Foreclosure - In California, purchase-money loans on a one- to four-unit residential dwelling are exempt from deficiency judgments. However, hard-money loans, such as a refinance or 2nd mortgage, may be subject to deficiency judgments.