With all of the foreclosures and short-sales taking place in the real estate market today, this might be one of the most important (yet unanswered) questions one can and should ask.
According to an article given to me today by Patricia Marbes and Amy Dunn of Wells Fargo Mortgage, the impact on credit scoresis dependent on more factors than just the foreclosure or short-sale itself.
For example, Fair Issac has communicated that FICO scores do not distinguish between a short sale, a deed in lieu and a foreclosure when rating a borrowers credit worthiness.
In addition, because this is a fairly new "trend" in the marketplace, there is concern that the true implications will not be known for quite some time and that borrowers should consult with an attorney to determine which direction to take to best protect their credit.
This article also states that a short sale MAY impact a credit score by up to 100 points and a foreclosure MAY impact it by as much as 280 points, but that many other factors (such as other collections and additional public judgements) can effect that score just as drastically.
And, although many "experts" are saying that a short-sale is the better than a foreclosure, that fact is not always accurate...especially if their is a public judgment placed against you for the deficiency of what you owe.
Each situation is different. There is no one magic formula or "right" answer on what decision
will have the least impact on you and your credit...
But, if you haven't spoken to a professional, I would encourage you to do so.
Contact me today at (321) 377-0157 or at LaShawn@LaShawnNorden.com for a confidential referral to an attorney who specializes in foreclosure and bankruptcy.
While I hope that none of you are in this situation, most of us know someone who is and I'd be happy to help them find a qualified professional who can and will guide them through this difficult maze.
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