SHORT SALE VS FORECLOSURE CAPE CORAL SHORT SALE FORT MYERS SHORT SALE LEHIGH ACRES FORT MYERS BEACH ESTERO BONITA SPRINGS FLORIDA SHORT SALE

SHORT SALE VS FORECLOSURE CAPE CORAL SHORT SALE FORT MYERS SHORT SALE LEHIGH ACRES SHORT SALE FORT MYERS BEACH SHORT SALE ESTERO SHORT SALE BONITA SPRINGS FLORIDA SHORT SALE

SHORT SALE VS FORECLOSURE

• Credit Score

SHORT SALE:  A short sale will minimally affect your credit score, usually around 50 points.  Late payments usually have the greatest negative impact on your credit score from a short sale and can average 30 points or more each.

FORECLOSURE:  Your credit score could be lowered 300+ points and will stay on your record for up to 10 years.

• Credit History

SHORT SALE:  There is not a credit reporting item for a short sale.  Upon sale, your mortgage company will typically report the short sale as 'Paid', 'Settled in full' or 'Paid as Negotiated' on your report.

FORECLOSURE:  A foreclosure will remain on your credit for up to 10 years and is permanent in the public records of your county.

• Current Employment

SHORT SALE:  A short sale is not an actual item on your credit report and typically will NOT affect your employment.

FORECLOSURE:  Your employer has the right and many times will actively check your credit if you are in sensitive positions.  Sometimes a foreclosure is grounds for immediate re-assignment or termination.

• Future Employment

SHORT SALE:  A short sale is not an actual item on your credit report and typically will NOT affect your employment.

FORECLOSURE:  Employers do check your credit history for many job applicants.  A foreclosure is one of the most negative items you can have on your credit and may affect future employment.

• Future Loan with a Mortgage Co.

SHORT SALE:  You typically do not have to declare to future mortgage companies that you previously performed a short sale.

FORECLOSURE:  On the federally mandated standard loan application form 1003, you will be required to answer 'YES' to the question 'Have you had property foreclosed upon or given title or deed in lieu thereof in the past 7 years?'  Answering 'yes' affects the interest rate you will receive.

• Future Fannie Mae Loan-Primary Residence

SHORT SALE:  After a successful short sale you may be eligible for a Fannie Mae backed loan in only 2 years.

FORECLOSURE:  After a foreclosure you will be ineligible for a Fannie Mae backed loan for a minimum of 5 years.

• Future Fannie Mae Loan-Non-Primary

SHORT SALE:  After a successful short sale you may be eligible for a Fannie Mae backed loan after only 2 years on non-primary residences.

FORECLOSURES:  After a foreclosure you will be ineligible for a Fannie Mae backed investment loan for a minimum of 7 years.

• Deficiency Judgement

SHORT SALE:  It is typical for the lender to give up the right to pursue a deficiency judgement against the borrower.  This will be stated in the short sale approval letter.

FORECLOSURE:  The bank has the right to pursue the deficiency judgement in all forecosures. 

• Deficiency Amount

SHORT SALE:  A short sale home is sold at or near market value and in most cases is a great value than a foreclosure sale which results in a lower deficiency.  This deficiency is typically forgiven.  This higher selling price helps to reduce your lender's loss.

FORECLOSURE:  If the home does not sell at a foreclosure auction it will have to go through the bank's REO system.  This will result in a longer sell time, additional carry costs with a potentially hgher deficiency amount in the end for the borrower.

Note that we are not attorneys or tax professionals.  These guilelines are subject to change. Seek appropriate legal and tax advice.

Call The Mary Neilson Team for all your Fort Myers, Cape Coral, Fort Myers Beach, Estero and Bonita Beach real estate needs.  Foreclosure and short sale experienced. 

Direct:  239-243-5989   Email:  mary@maryneilson.com