| Issues |
Foreclosure |
Successful Short Sale |
| Future Fannie Mae Loan - Primary residence |
A Home owner that loses a home to foreclosure is ineligible for a Fannie Mae-backed investment mortgage for a period of 5 years. |
A Home owner 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 mortgage after only 2 years. |
| Future loan with any mortgage company |
On any future application, a prospective borrower's foreclosure will adversely affect the future interest rates as the borrower must answer yes the 'have you have a property foreclosed... in the last 7 years?" |
There is no declaration or question regarding a short sale. |
| Credit Score |
Score may be lowered anywhere from 250 to more than 300 points. Typically will affect a credit score for over 3 years. |
Only late payments on a mortgage will show, and after the short sale, the mortgage is normally reported as 'paid as agreed' , paid as negotiated' or 'settled'. |
| Credit History |
Foreclosure will remain in 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 typically is reported as 'settled, 'paid'. |
| Security Clearance |
Foreclosure is the most challenging issue against a security clearance outside a serious misdemeanor or felony. If a client has a foreclosure and is a police office, in the military, in the CIA, security and any other positions that requires a security clearance, in many cases clearance will be revoked and the position may be terminated. |
On it's own, a short sale does not challenge most security clearances. |
| Current Employment |
Employers have the right and are actively checking the credit of all employees who are in sensitive positions. In many cases, foreclosure is reason for immediate reassignment or termination. |
A short sale in not reported on a credit history and therefore is not a challenge to employment. |
| Future Employment |
Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases it will challenge employment. |
A short sale in not reported on a credit history and therefore is not a challenge to employment. |
| Deficiency Judgment |
Arizona is a non-deficiency state |
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