Our sales meeting this morning gave loads of information regarding Foreclosures vs short sales.

The following are a few reasons sellers should seriously consider a short sale rather than go through a foreclosure:

 FORECLOSURE

A homeowner who loses a home (primary residence) to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.

Future loan with any mortgage company on any future 1003 application (standard loan appication), a prospective borrower will have to answer YES to question C, in Section VIII, that asks, "Have you had property foreclosed upon, or given title or deed in lieu thereof?" This will affect all future rates.

Credit score may be lowered anywhere from 150 to over 300 points.  Typically, this will affect the score for over 3 years.

SHORT SALE

A homeowner (on primary residence) who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.

There is no declaration of whether or not you have had a property foreclosed on.

On a short sale, 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 effect can be as brief as 12 to 18 months.

If you are at risk of losing your home and would like more information about a short sale, please let me know.

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