Special offer

Shortsale vs. Foreclosure

Real Estate Broker/Owner with Waypoint Realty Group, Inc BK3076143


In most cases a short sale is a better option than a foreclosure. A foreclosure has longer lasting repercussions than a short sale.
You may be eligible for a short sale if :
You have a hardship due to loss of job, medical expenses, divorce, etc. 
If you are in a negative equity situation and you owe more than your house is worth.
You are unable to afford your current monthly payment.
What effect does a short sale vs. foreclosure have on my credit?
A short sale has less of a negative effect on your credit score and credit history. Once a short sale is completed most lenders will report the debt as paid as agreed or paid as negotiated. This reporting is similar to a “settlement” on a credit card vs. a foreclosure is an unpaid debt.
Will I ever qualify for a mortgage again if I do a short sale?
Many people worry that they will never be able to get another mortgage if they do a short sale. Fortunately that is not true.  In most cases, as long as you meet the general mortgage criteria for the specific mortgage you are interested in obtaining, you are eligible for a mortgage after 2 years from the completion date of a short sale vs. a foreclosure is 7 years. 
Does a short sale become part of my permanent public record?
A short sale does NOT become part of a permanent public record vs. a foreclosure which DOES become part of your permanent public record.
Will I owe any money once a short sale is completed?
Once a short sale has been negotiated you will not owe any money to the lender as long as the agreement includes the waiver of any deficiency judgment vs. a foreclosure which doeshave a deficiency balance. A deficiency judgment is the amount the mortgage holder owes to the lender for the difference between the proceeds received from the sale of the property and the balance owed on the loan plus, in many cases, all additional costs incurred due to the foreclosure process.
Why shouldn't I just “walk away “from my home since I am so far behind on payments?
The single most important reason to do a short sale vs. foreclosure is……. If you allow the home to foreclose the lender has up to 5 years to go to a judge and ask for a deficiency action. If granted the lender has up to 20 years to come after the original mortgage holder(s) for the full amount of the deficiency judgment, which in many cases is tens of thousands of dollars if not $100,000 or more. The banks will usually wait for the homeowner to get “back on their feet financially” so they have assets to confiscate. A short sale truly gives you a “fresh start.”
Pamela Starusta 
Waypoint Realty Group, Inc
Posted by

"Contact me!! ....... Your Palm Beach County Real Estate Professional"

Palm Beach Real Estate

Pamela Starusta
Licensed Real Estate Broker

Waypoint Realty Group, Inc
2101 Vista Parkway #293
West Palm Beach, FL 33411

Homes for Sale in Palm Beach, FL

Kathy Stoltman
Ventura, CA

Hi Pamela, welcome to AR. You have stated some good advice for anyone contemplating foreclosure.

May 10, 2013 04:48 AM
Dale Baker
Baker Energy Audits and Commercial Properties Inspections - Claremont, NH
New Hampshire Relocation Real Estate Information
Howdy and afternoon Pamela
Folks sure will find your blog post mighty helpful!
Welcome to the ActiveRain Real Estate blogging community! You'll sure find a lot of mighty fine folks here in the community to get to know. I'm one of the many ActiveRain community members which are an ActiveRain Ambassador.
If you should ever have any questions about how to do anything or about the rules of the ActiveRain community, please feel free to contact me either by sending me a e-mail or by giving me a call, I'll sure be mighty glad to give you a helping hand. If for some reason I don't know the answer to a question which you might have, I'll sure will find out the answer and get back to you with an answer.
Take the time to look at the different groups within the community, pick some different groups to join, post your blog posts in them, be sure to take the time to read the posting guidelines of each group you might want to join, folks sure will want to follow them. Members can join as many or as few of the different groups within the community as they would like to. Members are able to post their blog posts in 5 different groups at a time.
Keep up your mighty fine job of posting! I'll be looking forward to seeing even more blog posts written and posted by you, plus seeing you join some of the mighty fine groups in the AR community.
Have a good one
Dale in New Hampshire
May 10, 2013 07:19 AM