|
Results |
Foreclosure |
Short Sale |
|
Effect on credit |
Will remain
on credit report for upto 10 years and when reported to credit bureau it
can lower score over 300 points. Typically remains in the County
Public record for life (permanent record). |
The biggest
impact to your score is the late mortgage payments. The score will
recover much quicker from a short sale. Currently there is no entry
made by the credit bureaus called "short sale". Instead the lender
reports, "Paid", "Paid in full" or "Paid as negotiated" |
|
Impact on your neighbors'
property values |
Foreclosures almost always become vacant before changing hands to the new
owner. Foreclosures typically sell for less than market value
because they are vacant and not kept up after the borrower moves. |
A short
sale is a dignified solution for homeowners with real financial hardships.
When a property is sold using a short sale, the property changes ownership
without the home becoming vacant. Short sales typically sell for
fair market value. |
|
Employment |
There is
little more damaging that can be found on your credit report by current
and future employers as a foreclosure. A foreclosure will make
positions with security clearance hard to get and hard to keep. |
Currently
there is no credit bureau report entry called "short sale". All that
will be reported is the late payments and then the way that the debt was
satisfied. |
|
Future mortgage applications |
The
standard federally mandated loan application asks the question, "Have you
had property foreclosed upon or given title or deed in lieu thereof in the
past 7 years?" |
Typically, there is no disclosure required for having
had a short sale. |
|
Deficiency Judgments |
In Georgia,
every lender can pursue a deficiency judgment. The amount the lender
is deficient may be taxable to the borrower with a 1099-C. |
It is
common for the lender to agree to a reduced pay off and waive their rights
to collect the full deficiency. We look to get the bank to release
the entire amount of the deficiency, |