Jerry Coleman
Remax Unlimited
Direct: 303-257-9929
Fax: 303-369-6959
jerrysells@comcast.net

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 What is a "short sale"?   A short sale is a negotiated settlement with the lender without going to foreclosure.  In this depressed market it is hard sometimes to sell your home for more than it is worth.  Situations beyond our control may make it necessary to leave your home even though it may not be the best time to sell.  In cases like this a short sale may be the option for you.  Below are differences between a foreclosure and a short sale.
                      
Issue                          
Foreclosure                                           
Short Sale            
Future Fannie Mae Primary Res Loan
A homeowner who loses a home to Foreclosure is ineligble for a Fannie backed mortgage for a period of 5 years.

A homeowner who successfully negotiates a short sale sale will be eligible for a Fannie Mae back mortgage after only 2 years.

Future Fannie Mae Loan-Non Primary
An investor who allows a property to go into foreclosure is ineligible for a Fannie Mae backed investment mortgage for 7 years.
Eligible after 2 years.
Future loan with any mortgage company
On any future 1003 application a prospective homeowner will have to answer YES to question C in Section VIII of the standard 1003 as to whether they have had a foreclosure in the last 7 years. This will affect future rates.
 There is no similar declaration of question regarding a short sale.
Credit score
 Lowered between 250-300 pts for up to 3 yrs.
 100-200 Pts.  A short sale affect can be as brief as 12-18 months.
Security clearances
The most challenging issue against a security clearance. Clearance can be revoked or job may be terminated.
 Does not challenge most security clearances.
Current employment
 Employers have the right to regularly check credit of employees who are in sensitive positions.  This could adversely affect employment.
Not reported on credit report.
Future employment
 Many employers are requiring credit checks. A foreclosure is the most adverse credit item and applicant may be challenged by employer.
Not reported on credit report.
Deficiency judgement
The bank has a right to pursue a deficiency judgement.
 In many short sales it is possible to have bank agree to not pursue this.
     
                                          
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