Short Sale vs. Foreclosure in Asheville

Issue

FORECLOSURE

SHORT SALE

Future Loan Ability

After a foreclosure, you are ineligible for a Fannie backed loan for up to 7 years.  Will affect future interest rates on any loan.

After a successful short sale, you will be eligible for a Fannie bakced loan after 2 years.

Credit Score

After foreclosure, your credit score may be lowered 250 to more than 300.  Your score can be affected for 3+ years.

Only late payments show on your credit report, so the affect on your score can be as little as 50 points for as little as 12 to 18 months!

Credit History

Foreclosure remains public record on your credit history for 7+ years.

A short sale is NOT reported on your credit history!

Security Clearances

After a foreclosure, a security clearance will almost always be revoked and the position terminated.

On its own, a short sale does not challenge most security clearances.

Current Employment

Employers have the right to check the credit regularly of all employees in sensitive positions.  A Foreclosure can challenge employment.

A short sale is not reported on a credit report and is therefore not a challenge to employment.

Future Employment

Many employers are requiring credit checks on all job applicants, so it can challenge employment.

A short sale is not reported on a credit report and is therefore not a challenge to employment.

Deficiency Judgment

In 100% of foreclosures, the bank has the right to pursue a deficiency judgment, meaning you are liable for the amount the lender lost in the foreclosure over what was owed.

In a properly managed short sale, the home will be sold closer to market value so the loss is less.  Also, the deficiency liability can often be negotiated away forever.