Foreclosure vs Short Sale

This report covers many of the differences and impacts of having a foreclosure versus a short sale on your record.

Credit Score

In a foreclosure, your score may be lowered anywhere from 250 to over 300 points.  Typically will affect score for over 3 years.

In some cases 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.  In some states default can be reported as a foreclosure however the time a short sale instead of a foreclosure will affect a borrow is much less.  A short sale’s affect can be as brief as 12 to 18 months.

Current Employment

Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions.  A foreclosure in many cases is ground for immediate reassignment or termination.

A short sale is not reported on a credit report and is therefore not a challenge to employment.

Security Clearances

Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanour or felony.  If a client has a foreclosure and is a police officer, in the military, in the CIA, Security, or any other position that requires a security clearance, it will be revoked and position terminated.

A short sale on its own does not challenge most security clearances.

For a complete and free report on the consequences of  Foreclosures versus Short Sales please contact us.