What about my credit? Phoenix Real Estate, The Holt Group, RE/MAX Sonoran Hills

One of the primary benefits of a successful Short Sale is avoiding the credit damage of a foreclosure. The damage to your credit done by a foreclosure lives on for years – at least 10 years.

Your credit will recover much quicker from the credit dings of a few late mortgage payments, if you keep your other accounts current. So, consider allocating your funds to meet necessities (food, utilities, household needs, auto expenses, and such) first. Beyond paying for necessities, plan to pay other bills to keep as many accounts current as possible.

Keep “Necessary” Accounts Current

When deciding which credit bills to pay, review the terms of your credit accounts. If you are using a credit card (temporarily) to pay for necessities, you want to be sure not to jeopardize the availability of that account.

A Short Sale may be just one part of a larger effort to get through a tough period. We want to help make it's possible for your credit to recover quickly. You need to avoid foreclosure – and we can help.

Did you know?

· Banks prefer a Short Sale over a Foreclosure. They do not want your house back!

· Short Sales have MUCH LESS of a negative impact on credit than foreclosure.

· Foreclosure stays on credit for 10 years, reduces score by 300 plus points, jeopardizes security clearance, and endangers current and future employment.

· Shorts Sales are one of the most difficult residential real estate transactions and far too important to trust to just any agent.

· 7 out of 10 homeowners go into FORECLOSURE without intervention. DO NOT let that happen to you!

· There will come a time when you will want to look back on this situation and know you did everything you could. TAKE ACTION NOW!

Foreclosure vs Short Sale

What's the difference between a foreclosure and a short sale?

ISSUE	FORECLOSURE	SUCCESSFUL SHORT SALE
Future Fannie Mae Loan- Primary Residence (Effective 5/21/08)	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 (Effective 5/21/08)	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 after only 2 years.
Future Loan with any Mortgage Company	On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 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.
Credit Score	Score may be lowered anywhere from 250 to over 300 points. Typically will affect score for over3 years.	Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as50 points if all other payments are being made. A short sale’s affect can be a brief as 12 to 18 months.
Credit History	Foreclosure will remain as a public record on a person’s credit history for 10 years or more.	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’.
Security Clearances	Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. 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 position will be terminated.	A Short Sale on its own does not challenge most security clearances.
Current Employment	Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination.	A short sale is not reported on a credit report and is therefore 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 will challenge employment.	A short sale is not reported on a credit report and is therefore not a challenge to employment.