Minnesota Short Sale Expert

I speak to people everyday that are virtually throwing their hands up in the air and saying “let the bank have it..!!” Meaning they are letting their property go back to the bank through the foreclosure process rather than fight to either save it or find another alternative to a foreclosure. However, many if not most people have no idea what other options are out their for them. The buzz word right now is “loan modification” which for a large section of homeowners that are in the situation they are in can’t qualify for a loan modification anyways. So the alternative is to do a short sale.

There are some major differences that people should know about foreclosures vs short sale. Some of them are as follows:

1. Two things stay with a homeowner forever…a felony and a foreclosure…NOT a short sale.
2. A foreclosure will lower your credit score by as much as 250 to 300 points. In a short sale only late payments will show on the credit report which could affect the score by as little as 50 points depending on how many payments have been missed.
3. A short sale’s effect on your credit score can be as little as 12-18 months. A foreclosure will typically affect it for over to 3 years.
4. A homeowner that loses a home to foreclosure will not be eligible for a Fanny Mae backed mortgage for a period of 5 years. A homeowner that successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.
5. 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 therefore is not a challenge to employment.
6. Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony. If a homeowner has a foreclosure and is a police officer, in the military, CIA, Security or any other position that requires a security clearance in many cases clearance will be revoked and position will be terminated. A short sale on its own does not challenge most security clearances.

I am a Certified Distressed Property Expert (CDPE) and I can help you through the process. Call me directly at 763-242-6303 for more information.

Rob Reinke

Rob@MnShortSaleExpert.com