Many experts in the field, and from our own experience, find that a short sale is about 100 to 200 points less damaging to a FICO score, compared to a Foreclosure. Not only is the FICO score reduction a factor to consider, but also of importance is the duration of time the credit is negatively affected.
Foreclosures can remain on ones credit report for 7 years or more. The negative effects of a Short Sale can often be removed within several years, or less. There is an additional advantage of a short sale compared to foreclosure regarding a shorter delay to renewed loan worthiness. Fannie Mae (FNMA) recently altered one of their policies. A past Orange County home owner has to wait 5 years after a Foreclosure Sale before FNMA will underwrite a new mortgage loan. If the Orange County home owner conducted a Short Sale, then the wait time for a new loan with FNMA is just 2 Years !
Lastly, we have established an association with a credit restoration company. This excellent firm has worked with many of our past short sale clients, and they have been able to make substantial improvements to our clients credit scores who went through a short sale. For foreclosures, their is little this company can do.
There are other benefits to a Short Sale for Orange County home owners, as compared to foreclosure, which we published in our book “Should I Short Sale My Home?“. For the time being, you can download this book for FREE by clicking on the previous link. For more information or questions, please fee free to contact us at: 949-388-3396 or drop us an email at: Info@ShortSalesASAP.com
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