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Is short sale as bad as foreclosure?

I've been told that short sale is not nearly as bad but recently read that they are pretty much the same other than the waiting period. by SSkinn_195_709 from Butler, Wisconsin. Oct 9th 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

If there were late payments over 30 days, or any 4 month late payments, then yes..it's just as bad as a foreclosure, and most waiting periods are the same as a foreclosure.. if there were no late payments, then FHA has a loan product that you might qualify for, however, its only FHA... all other waiting periods are the same as a foreclosure... however a short sale has less of an impact to your credit score than a foreclosure, so your credit will recover faster... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Oct 9th 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,944 contributions

If possible, always do a short-sale. There are a few hard to qualify for exceptions with a short-sale when getting a new mortgage, but the big benefits of a short-sale over a full foreclosure have little to do with buying a new home. www.wi-mortgagebroker.com

Oct 9th 2012
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

If, during the 12 months preceding the short sale, you made all payments in the month it was due (even if it was paid on the last day of the month), then you are eligible immediately for a new FHA loan. In other words, it is NOT treated as a foreclosure. There are some restrictions that relate to the reason for the short sale, however. If one or more of the payments in the twelve months leading up to the short sale were not paid in the month due, then it is likely to be treated similar to a foreclosure and that means a 36 month wait from the day the transfer deed was recorded for a new FHA loan. Conventional loans and some lender overlays my restrict this further, so you will want to work with a Mortgage Banker/broker, instead of one of the Big banks or national mortgage factories. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Oct 9th 2012
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Ken Burrows (mortgagesforamerica)
#20 ranked lender in Nevada - 572 contributions

You can go through Fannie Mae with 20% down after 2 years or wait 3 years for FHA.

Oct 9th 2012
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Derick Condron (rightstartoregon)
#32 ranked lender in Oregon - 598 contributions

A short sale will not be as impactful on your credit scores, but in terms of waiting periods typically it is just as bad. If you are not late when you complete the short sale then you may have an option with FHA, the banks are usually pretty smart though and one of the requirements to look at your short sale is that you will need to be late so you then have to wait. 3 years for FHA and 7 for conventional loans

Oct 10th 2012
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