FORECLOSURE

  VS. 

 SHORT SALE 

                             QUESTIONS & ANSWERS
 

Will I ever be able to purchase another home?

Foreclosure:  A homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.

Short Sale:  A homeowner rwho successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.

Will an Investor be able to make another investment mortgage?

Foreclosure: An Investor who allows a property to go to foreclosure in ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.

Short Sale:  An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

How will any future mortgage be affected?

Foreclosure: On any future 1003 application, a prospective borrower will have to answer YES on a standard 1003 to a question regarding having a property foreclosed upon or given title or deed in lieu in the last 7 years.  This will affect future rates.

Short Sale: There will be no question regarding a short sale.

How will my credit score be affected?

Foreclosure:  Score may be lowered anywhere from 250 to over 300 points.  Typically your score will be affected for over 3 years.

Short Sale: Only late payments on mortgage will show and after the sale the mortgage will be reported as paid or negotiated.  This will lower your score by 75-100 points if all other payments are being made.  A short sale´s affect can be as brief as 12 to 18 months.

How will my credit history be affected?

Foreclosure: Will remain as a public record on a person´s credit history for 10 years or more.

Short Sale:   Not reported on a credit history. The loan is typically reported 'paid in full, settled´.

What if I should need a Security Clearance?

Foreclosure: The most challenging issue against a security clearance outside of conviction of a serious misdemeanor or felony.  If a client has a foreclosure and is a police officer, in the military, in the CIA,Security, or any other position that requires a security clearance in almost all cases clearances will be revoked and position will be terminated.

Short Sale:   Does not challenge most security clearances.

Can a Foreclosure or Short Sale affect my employment?

Foreclosure:  Employers have the right to actively check the credit of all employees who are in sensitive positions.  A foreclosure in many cases is grounds for immediate reassignment or termination.

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

Can a Foreclosure or Short Sale affect any future employment?

Foreclosure:  Many employers are requiring credit checks on all job applicants.  A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment.

Short Sale:  Not a challenge to employment.

 
If you have been served a foreclosure notice, don't give up hope.  You may have a 6 month redemption period during which you can sell your home with a Short Sale.  Call me for details. 

Todd Taliaferro   248-207-9000 (Direct)  or  toddt@remax.net