Here are some info on foreclosures and short sales.
Foreclosure will remain as a public record on a person’s credit history for 7 years or more.
A Short Sale is not reported on a persons credit history. There is no specific reporting item for ‘short sale’. In most cases a loan is typically reported ‘paid in full, settled’ or ‘paid as negotiated’.
Foreclosure is the most challenging issue against a security clearance outside 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.
On its own, a short sale does not challenge most security clearances.
The above material is my opinion and it is always recommended to seek qualified professional legal and financial advice when looking at your real estate sales and purchasing options.