Short Sale Vs Foreclosure

       Short Sale & Short Sale vs. Foreclosure

If your looking down the barrel of a foreclosure you might feel helpless, depressed and shameful, but you shouldn't; In California 22% of people are unemployed and 1/3 of people unemployed have been out of work for over a year. (Something that hasn't happened since the great depression)  Everyone is having a hard time so don't feel bad, look at your options and choose the best one for you and/or your family.

A Short Sale means the house sells for less than is owed to the bank;  If you owe more than the house is worth this might be the best option for you.  A foreclosure hovers over you for up to ten years , e.g., like a relentless black cloud and there is no umbrella in sight.  It can decimate your credit score up to 300 points, possibly more if you missed some payments, i.e.,  you wont be able to get a credit card and forget about buying another house.  With a  Short Sale you can start looking for a new home in 2 years or less. 
The IRS is offering programs to people who choose Short Sale as their option by waiving the taxes on the sale of your home.
The bank will not come after you for legal recourse which would take a chunk out of your pocketbook for sure.

The bottom line is you might lose money in the deal but you will have better credit and lower loan rates in the long run.  This was an unfortunate setback, but it's not the end of the world!, All you can do is move on and be strong!