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Short

 Sale  vs.  Foreclosure  

  Foreclosure   Short  Sale  


Future  Ability  to  Purchase     On  future  1003  applications,   There  is  no  question  on  the  
a  borrower  would  be   1003  application  with  
required  to  answer  yes  to  the   regard  to  short  sales.  
question,  “Have  you  had  a  
property  foreclosed  upon  or  
given  title  or  deed-­‐in-­‐lieu  
thereof  in  the  last  7  years?”  
The  yes  response  may  
impact  future  interest  rates  
and  ability  to  borrow.  
Impact  on  Credit  Score   Scores  can  drop  from  250  to   Only  late  payments  will  
300  points.   impact  the  credit  score.  After  
the  short  sale  is  completed,  
mortgage  may  be  reported  
as  ‘paid  as  agreed,’  ‘paid  as  
negotiated,’  or  ‘settled.’  This  
can  lower  the  score  as  little  
as  50  points.  A  short  sale’s  
effect  on  the  credit  can  be  as  
short  term  as  twelve  to  
eighteen  months.  
Impact  on  Credit  History   Foreclosure  remains  on  the   A  short  sale  is  noted  
credit  history  for  seven   specifically  on  the  credit  
years.   report.  Closed  short  sales  
would  appear  as  ‘paid  as  
negotiated’  or  ‘settled’  or  
‘paid  as  agreed.’  
Security  Clearance   Foreclosure  has  a  serious   Since  short  sales  are  not  
impact  on  an  individual’s   specifically  noted  on  credit,  
security  clearance  and  can   they  are  not  reported  to  
result  in  revocation  of   impact  security  clearance.  
clearance  in  some  cases.  
Deficiency  Judgment   In  foreclosures  (except  in   In  a  successfully  negotiated  
states  with  anti-­‐  deficiency   short  sale,  the  bank  may  
laws),  the  bank  can  pursue  a   waive  the  right  to  pursue  
deficiency  judgment.   deficiency.  
Current  Employment   Employers  can  actively   A  short  sale  is  not  reported  
check  credit  for  employees   on  credit  and,  as  such,  will  
with  sensitive  positions.   not  challenge  employment.  
Depending  upon  company  
policies,  a  foreclosure  could  
have  an  impact.  
Future  Employment   Many  employers  require   A  short  sale  is  not  reported  
credit  checks  for  all   on  credit  and,  as  such,  will  
applicants.  A  foreclosure  on   not  challenge  employment.  
the  credit  history  could  be  
detrimental  to  a  job  search.  
 

Information  courtesy  of  Short  Sale  Expeditor®  


www.shortsaleexpeditor.com  

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