First of all you need to understand no body even the bank can do a deal on your house until it forecloses, the bank does not own your home, you do, the bank just has a mortgage lien on the property.
Secondly you should be making every effort to avoid foreclosure through a modification, Do you know short sale is a form of foreclosure. Foreclosure is a life changing event you need to do something about it, get proactive, showing you were proactive to the court many times can save your home, courts are getting fed up with uncooperative banks. Call your bank now ask for a modification and document everything that is said or done and bring it to court.
Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of-foreclosure
Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like your job, yes employers are checking credit records these days.
Your credit score will be reduced by 200-400 points, short sale a little less 100-200 points.
All forms of foreclosure stay on your credit report for 10 years.
After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure
* Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
* Buying After a Foreclosure with Extenuating Circumstances
The waiting period is 3 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
* Buying After a Deed-in-Lieu of Foreclosure with Extenuating Circumstances
The waiting period is 2 years up to 7 years.
* Buying After a Short Sale
The waiting period was just upped from 2 to 3 years. However, if a seller does not have a 60-day late pay, that seller may immediately buy another home. It's a reason to stay current on your payments while the home is on the market as a short sale.
In addition to the waiting period, most loans require a minimum down payment of 10% and a minimum FICO score of 680. The home purchase must also be the principal place of residence, not a rental nor a vacation home.
Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.