I wrote this blog some time ago maybe this will help.
SUCCESSFUL SHORT SALES
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 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 after 2 years
Score may be lowered anywhere from 250 to more than 300 points. Typically will affect a credit score for over 3 years
Late payments on mortgage will show, and after sale, mortgage is normally reported as "paid as agreed", "paid 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 position will be terminated.
On its own, a short sale does not challenge most security clearances
Employers have the right and are actively checking the credit of all employees who are in sensitive positions. In many cases, a foreclosure is 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 one of the most detrimental credit items an applicant can have (besides bankruptcy/charge off) and in most cases will challenge employment
A short sale is not reported on a credit report and is therefore not a challenge to future employment
In 100% of foreclosures (except in those non-deficiency judgment states), the bank has the right to pursue a deficiency judgment
In some successful short sales, it is possible to convince the lender to sign a release and give up their right to pursue a deficiency judgment against the homeowner
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 longer time to sale in a declining market. This will result in 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
Deficiency Judgment (statute of limitations)
In a foreclosure, the first mortgage holder has 6 months to file for a deficiency judgment (the second mortgage holder has 6 years).
If the mortgage holder does not release their right to pursue a deficiency judgment they have up to 6 years to file and seek a deficiency judgment.
Helene M Moore