|
|
|
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 mortgage after only 2 years.
|
|
Future Fannie Mae
Loan
Non-Primary
Residence
|
|
An investor who allows a property to go to foreclosure is
ineligible 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 in 2 years.
|
|
Future Laon with any
Mortgage Company
|
|
On any future application, a prospective borrower will have to
answer yes to question C in section VII of the standard 1003
form that asks " Have you had property foreclosed upon or
given title or deed in lieu thereof in the last 7 years?" This will
affect future rates.
|
|
There is no similar declaration or question
regarding a short sale.
|
|
|
Score may be lowered anywhere from 250 to more than 300
points. Typically will affect a credit score over 3 years.
|
|
Only late payments on mortgage will show, and
after sale, mortgage is normally reported as
paid as agreed, "pas 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.
|
|
|
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'.
|
|
|
Foreclosure is the most challenging issue against a security
clearance outside a serious misdemeanor or felony
conviction. 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, in almost all cases clearance
will be revoked and the position will be terminated.
|
|
On its own, a short sale does not challenge
most security clearances.
|
|
|
Employers have the right and are actively checking credit of
all employees who are in sensitive positions. In may cases, a
foreclosure is a reason for immediate reassignment or
termination.
|
|
A short sale is not reported on a credit report
and is therefore not a challenge to employment.
|
|
|
Many employers are requiring credit checks on all job
applicants. A foreclosure is on of the most detrimental credit
items an applicant can have and in most cases will
challenge employment.
|
|
A short sale is not reported on a credit report
and is therefore not a challenge to employment.
|
|
|
In 100% of foreclosures (except in those states where there
is no deficiency), the banks has the right to pursue a
deficiency judgment.
|
|
In some successful short sales, it is possible to
convince the lender to give up the right to
pursue a deficiency judgement against the
home owner.
|
|
Deficiency Judgment
(Amount)
|
|
In a foreclosure, the home will have to go through an REO
process if it does not sell at auction. In most cases this will
result in a lower sales price and a higher possible deficiency
judgment.
|
|
In a properly managed short sale, the home is
sold at a price that should be close to market
value, and in almost all cases will be better than
an REO sale resulting in a lower deficiency.
|
|
