|
Issues |
Successful Short Sale |
Foreclosure |
Credit Score
|
A Short Sales effect can be as brief as 12 to 18 months. Only
late payments on the mortgage will show. This can lower the
score as little as 50 points
|
A Foreclosure will affect your credit score for over 3 years and
can lower that score between 250 to 300 points
|
|
Credit History |
A Short Sale MAY NOT be reported on a
person’s credit history
|
A Foreclosure will stay on a person’s credit history for 10
years or more
|
Deficiency Judgment
|
In some successful Short Sales it is possible to convince the
lender to give up their right to pursue a deficiency judgment
against the
homeowner
|
In 100% of Foreclosures (except in those states where there is
no deficiency protection in the law) the bank has the right to
pursue a deficiency judgment
|
Future Employment
|
A Short Sale is not to be reported on a credit report and
therefore should not be a challenge to employment 2
|
Most employers require a credit check on all job applicants.
Foreclosures are one of the most detrimental credit items for
your credit report. This could affect employment
|
|
|
|
Type of Loan |
Successful Short Sale |
Foreclosure |
Fannie Mae1
|
The homeowner will be eligible for a Fannie Mae-backed mortgage
after 2 years
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
FHA
(late on payments)
|
3 years from the date the FHA Insurance is paid by the
lender – not the date of the Short Sale closing before a
borrower may
be
eligible for another FHA loan
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
FHA
(current)
|
There is NO WAIT for Freddie- or Fannie-backed loans if current
on all obligations, including installment debt
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
VA
(late payments)
|
The homeowner will be eligible for a Fannie Mae-backed loan
after 3 years
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
VA
(current)
|
The homeowner will be eligible for a Fannie Mae-backed loan
after 3 years
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
Conventional
(late payments)
|
The homeowner will be eligible for a Fannie Mae-backed loan
after 2 years
|
The homeowner is not eligible for a Fannie Mae-backed loan for 5
years
|
Conventional
(current)
|
There is NO WAIT for a Freddie- or Fannie-backed loan if current
on all obligations, including installment debt
|
Future rates may be affected if you have been foreclosed on in
the past 7 years
|
1 Fannie Mae Announcement 08-16: Michael A.
Quinn, Senior Vice President, Single Family Risk Officer
2 Short Sales are currently not explicitly reported on a credit
report
Information supplied by First American Title
Insurance Company |
| |
