Foreclosure vs. Short Sale
This is one in a series of blog entries dedicated to Short Sales and the
Short Sale process from the owner's perspective.
Many home sellers ask, "What is the difference to my credit report
depending on if I choose a Foreclosure or a Short Sale?". While there are
many factors involved in your credit report and FICO score, the simple answer is
that a foreclosure in any form is DEVASTATING to your credit report. In
addition to losing up to 3 times as many FICO score points, a seller will not
qualify to use FHA financing again for 5 years. Conversely, a seller who
opts for a short sale can in some cases show little or no damage to the credit score
(depending on how the sale is reported), and will then be able to apply for FHA
financing after just 24 months.
The last transaction where I actually heard about the difference in credit
score was just last week. The seller had a pre-short sale FICO score of
730. After the short sale had recorded and been reported to the bureaus,
the seller had lost only 60 points in credit score and still had a respectable
670.
As a general rule, if a seller who opts for a short sale keeps all other
accounts current and continues to use credit as they did prior to the short
sale, he/she can expect to be somewhat close in FICO score to pre-short sale
score, within 12-15 months.
I am an experienced Short Sale Agent who regularly assists sellers in Corona &
Riverside, California. I have contacts in other surrounding cities which I
can refer to you, but I believe in working with ONLY those sellers I can help
most effectively. If you own in Riverside or Corona, please give me a
call.
Cameron Novak
Corona & Riverside Short Sale
Agents
The Homefinding CenterTM
Corona, California
951-212-7479
;)
;)
