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Foreclosure VS Short Sale: How each affects future loans with any Mortgage Company

By
Real Estate Agent with West USA Realty

Foreclosure:  On any future application, a prospective borrower will have to answer YES to question C in section VII of the standard 1003 form that asks, "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?"  This will affect future rates.

Short Sale:  There is no similar declaration or question regarding a short sale.

Diane Donnelly
Keller Williams Flagship - Annapolis, MD
Anne Arundel County, MD Real Estate

Hi Shayne, this is a great point.  My lender just said he saw the effects of a short sale on a recent credit report that he pulled and he said it had the same "credit impact" as a foreclosure and showed as a default as opposed to a paid as agreed which is what we shoot for in the negotiation.

Are you finding the same to be true?

 

Oct 23, 2009 08:35 PM