1. Foreclosure is a permanent stain. On all future mortgage applications and on many job applications, people will have to disclose that they lost a property in a Sheriff’s Sale. This means that you will likely pay higher interest rates, which can add up to tens of thousands of dollars. This is a credit item that is asked specifically in all credit inquiries. There is no seven-year time limit on this item.
2. Possible deficiency judgment. Your bank can still sue you after a Sheriff’s Sale and collect any amount they did not recover.
3. Badly damaged credit. Credit scores will be lowered by 300+ points per loan. Along
with bankruptcy, a foreclosure is one of the most devastating credit issues you can have.
A short sale has a lesser impact on your credit, and you could be back to normal within
two years.
4. Tax liability. The tax liability in a foreclosure or deed-in-lieu of foreclosure may be
higher than in a properly negotiated short sale.
5. Ineligibility for a government insured loan. A person who was foreclosed upon will
be ineligible for a government insured loan for 5-7 years, whereas in a short sale the
time period is only two years. A foreclosure is the one credit report item that is almost
impossible to have repaired.
6. Potentially damaging for employment. Many current employers run credit checks.
Future employers often do. A foreclosure can put a current position in jeopardy and
prevent you from being hired to a good job in the future.
7. Negative on security clearances. Security clearances and sensitive government
positions, including but not limited to military and law enforcement, can be jeopardized
by a foreclosure. Revocation of a security clearance could trigger a job reassignment or
a firing.
8. You have alternatives. As your trusted short sale guide, we will explore every option with
you to help you reach the best solution.
9. Do everything you can. While it may not seem like it now, there will come a time when
your current financial troubles will pass. You will…FEEL GOOD…knowing that you did
everything in your power to avoid this devastating financial consequence that millions of
people face today.
