If you cannot bring your loan current, afford to make payments moving forward, or are unable to sell the property for the full amount of the loan, your lender may accept less than the amount owed as full payment. This is what is called a "SHORT SALE".
Many people wonder if there really is that big a difference between the two. THERE IS!
PRO: Under the terms of a short sale, your lender may forgive your mortgage debt in its entirety according to the terms outlined in The Mortgage Debt Relief Act of 2007. Fannie Mae has announced a reduced mandatory waiting period to establish credit history to 2 years after the completion of a short sale. This mandatory waiting period after a short sale is lower than the required 5-7 years following a foreclosure.
CON: You must sell your home
So, sell your home via a short sale, and you can reestablish your credit after just two years. Wait and have your home foreclosed upon and your wait will be 5 to 7 years.
Need to talk about the short sale process and learn your options? Please call me at 386-956-0466. We'll work through it together.
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