Kelly Barnhart, CRS, ABR
Call now: (702) 340-6232
Kelly Barnhart | Call Direct at: (702) 340-6232 | Email: kbarnhart@windermere.com
FORECLOSURE VS SHORT SALES
Posted on April 2, 2010
Homeowner Consequences
| Issue | Foreclosure | Successful Short Sale |
| Future Fannie Mae Loan-Primary Residence | A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of 5 years. | A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgahge after 2 years. |
| Future Fannie Mae Loan-Non Primary Residence | An investor who allows a property to go to forewclosure is inelligible for a Fannie Mae-backed investment mortgage for a period of 7 years. | An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed investment mortgage after 2 years. |
| Credit Score | Score may be lowered anywhere from 250 to more than 300 points. Typically will affect a credit score for over 3 years. | Late payments on mortgage will show, and after sale, mortgage is normally reported as "paid as agreed," paid as negotiated," or "settled." This can 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. |
| Credit History | Foreclosure will remain as a public record permanently, and on a person's credit history for 10 years or more. | A short sale is not reported on a credit history. There is no specific reporting item for "short sale." The loan is typically reported "paid in full, settled." |
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