Benefits of a Short Sale compared to a Foreclosure

Overview

How The Doctor Realtor Will Help You Benefits of a Short Sale Ethical Questions Credit Score Impact Agreement Sample Loans for 38 Cents Short Sale Alternatives Loan Modifications Tax Consequences

When your home is worth less than the amount owed on the mortgage(s) - it's referred to as being underwater.

You can't sell it the normal way. If you can't afford it or don't want to keep losing money, can't get your lender to write down the amount owed, what can you do? Foreclosure and bankruptcy will ruin your credit for years.

Usually, in these circumstances, a "short sale" is the solution. A short sale is like a normal sale, except that your lenders need to agree to accept less money than the amount owed as payment in full. Arizona Short Sale Doctor specializes in negotiating short sale solutions with lenders to provide you the benefits of a short sale. Learn how.

**Benefits of a Short Sale vs. Foreclosure**
Item	Forced Foreclosure	Doctor Negotiated Short Sale
Sale Price	Lower	Higher
Loan Liability	Lenders and debt collectors can sue for 6 years to recover the unpaid balance of many recourse loans such non-purchase loans, refinance loans, investor loans, and post-purchase HELOC's not covered by federal or Arizona anti-deficiency laws.	Homeowners have the ability to negotiate with lenders to eliminate debt, usually with no payment to lenders.
Credit Score	Your credit score may decrease between 250 and 300 points. It will not quickly recover, typically not within 3 years.	Your credit score may decrease as little as 50 points, depending on how many late payments you have, and if you keep making other payments on time. Your credit can begin to recover within the first year. Read a Doctor's Example.
Credit History	A foreclosure will remain on your credit report for 7 years, and be noted as a derogatory item.	A short sale is not recorded as a specific item. The loan account will be noted as "Closed (Paid)" or "Paid in full, settled".
Employment	Many employers conduct credit checks on current employees and job applicants. A foreclosure is one of the most harmful items you can have on your record.	Because a short sale is not reported on a credit report, and accounts were settled, your job application is stronger.
Interest Rates	A foreclosure will indicate greatly increased risk, and you will generally face increased credit card rates, increased future loan rates, and even higher insurance rates that are based on credit.	Because a short sale is not reported, you will only be impacted as you would with any other missed payments on your credit record.
Future Loan Applications	Question C in Section VIII of the Universal Residential Loan Application asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years".	There are no similar questions about a short sale. You will get a better mortgage.
Future Homeowner Fannie Mae backed Loans	After a foreclosure, a homeowner cannot get a Fannie Mae backed mortgage for a period of 5 years.	After a negotiated short sale, a homeowner can qualify for a Fannie Mae backed mortgage after only 2 years.
Future Investor Fannie Mae backed Loans	An investor who allows a home or any property to be reclaimed through foreclosure cannot get a Fannie-Mae backed mortgage for 7 years.	An investor who sells a home in a short sale will be able to get a Fannie-Mae backed mortgage after 2 years.

Arizona Short Sale Doctor
• Scottsdale, AZ 85260
Direct 480-309-5048 • Fax 480-882-0182
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