Foreclosure vs. Short Sale Information, CDPE Cypress 90630

Homeowner Consequences

7 Issues To Consider

Foreclosure

1. Future Fannie mae Loan (Primary Residence): A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.
2. Future Fannie Mae Loan (Non-Primary): An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.
3. Credit Score: Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for oever 3 years.
4. Credit History: Foreclosure will remina as a public record on a person's credit history for 10 years or more.
5. Security Clearances: Foreclosure is the most challenging issue against a security clearance outisde of a 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 clearance will be revoked and position will be terminated.
6. Current Employment: Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many casses is ground for immediate reassignment or termination.
7. Future Employment: Many employees 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

1. Future Fannie mae Loan (Primary Residence): A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.
2. Future Fannie Mae Loan (Non-Primary): An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.
3. Credit Score: Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale's affect can be a bried as 12 to 18 months.
4. Credit History: Short sale is not reported on a credit history. There is no specific reporting item for a 'short sale'. The loan is typically reported 'paid in full, settled'.
5. Security Clearances: A short sale on its own does not challenge most security clearances.
6. Current Employment: A short sale is not reported on a credit report and is therefore not a challenge to employment.
7. Future Employment: A short sale is not reported on a credit report and is therefore not a challenge to employment