Compare Short Sale Vs Foreclosure in Los Angeles, California
Deciding on a short sale vs foreclosure is a serious decision. Many homeowners are struggling to make their mortgage payments for reasons such as unemployment, a decrease in income, illness, divorce, adjustable rate mortgages, etc. Perhaps you have tried to work with your lender on a loan modification and have been denied.
Let's compare short sale vs foreclosure:
What about credit?
With a short sale, only late payments will show up on your credit and after the short sale, the mortgage is usually reported as "paid as negotiated" or "settled". Your credit score should not be lowered too much and the effect of a short sale may last about 12-18 months. With a foreclosure, your credit score may be lowered anywhere around 300 points and the foreclosure may affect your credit for about 3 years.
What about future employment?
There is no such thing as "short sale" reported on your credit. Whereas, a foreclosure is visible on your credit record for an employer to see.
What is Deficiency Judgment?
The difference of the amount you owe on your mortgage and the amount which the property sells for, either in a short sale or a foreclosure is called the deficiency. In some short sales, it may be possible to have the lender waive or give up their right to pursue the homeowner for a deficiency judgment. With foreclosure, the lender may be able to pursue a deficiency judgment. Also, typically properties will sell for less in foreclosure sale.
What about qualifying for a loan in the future?
A homeowner that completes a short sale may be eligible for a loan to purchase property within 2 to 3 years. That homeowner may have to wait 5 years to be eligible for a loan if they have gone through a foreclosure.
Feel free to visit www.Short-Sale-vs-Foreclosure-Help.com or http://www.distressedhomeoptions.com/ for more information.
Contact: Sara Mehrpouyan, CDPE Short Sale Realtor Rodeo Realty (818)903-2040
*The information provided here should not be constituted as legal advice. The content is intended to provide general information about the short sale and foreclosure processes, and should not be acted upon without the counsel of an attorney and tax advisor.
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