Short Sales and foreclosures are increasing in Kissimmee, Florida. Are you in pre-foreclosure or foreclosure? A Certified Distressed Property Expert (CDPE) is a real estate agent trained to help homeowners avoid foreclosure. A CDPE has specialized training in the complex issues confronting distressed homeowners and can explain foreclosure avoidance options available in more detail. Through comprehensive training and experience, CDPEs can provide solutions for homeowners facing hardships in today’s market, specifically short sales and foreclosures.

Do you need to catch up on your house payments? Are you facing foreclosure, pre-foreclosure, or received a default notice from your lender? You may be surprised at the options available to you.

However, there’s a lot of confusion in the media on whether a short sale is better for a homeowner than a foreclosure. To find the answers, let’s look at Short Sale vs. Foreclosure.

Short Sale vs. Foreclosure

• A short sale is a voluntary process in which the homeowner sells the property for less than the mortgage amount owed.
• A foreclosure is involuntary, where the lender takes legal action to seize the home. The lender takes ownership of the home and sells it to recover the amount owed to them.

Both have short—and long-term consequences, and you need to understand and evaluate them before deciding which path to take.

#1: The Ability to Obtain a Mortgage in the Future.

In Foreclosure: You may have to wait up to seven years to qualify for a new home loan.

In Short Sale, a homeowner may qualify for a Fannie Mae-backed loan in only two years if they meet loan criteria. If a homeowner who made the short sale meets specific eligibility requirements, they can buy a home within two years with even fewer loan criteria.

#2 The effect on Credit Score and Credit History.

This is one of the most widely debated topics surrounding short sales and foreclosures. Some have made the unfortunate argument that there’s no difference in the effect on a credit score regardless of whether the homeowners short sale or allow a home to foreclose. While no one’s credit profile is the same, short sales will almost always cause credit scores to decline less than foreclosures. It can affect an individual’s credit score by as little as 50 points, as all other credit installments are being paid. And, in some anecdotal cases, there’s been little or no effect on a credit score in a short sale.

Another benefit of credit and short sales is that if they are reported as Paid As Agreed or Paid as Negotiated, they usually remain on a homeowner’s record for 2-3 years. Foreclosure is recorded, in no uncertain terms, on a credit report, remains in credit history for seven years, and is part of permanent public record.

#3 Possible effects on Security Clearances in a Variety of Industries.

While it may not be as common, there are many homeowners whose employment involves some security clearance or security check. Foreclosures almost always have a negative effect on security clearances. On their own, short sales will rarely challenge most security clearances. Many people don’t understand that security clearances today are required in various industries, not only military. For example, high level police, fire department, government agencies, software development agencies, certain areas of telecom and much, much more, all require security clearances or security checks.

#4 The Effect on Current and Future Employment.

This may be the single most important issue to many homeowners today. As more employers review credit upon new hire employment and conduct continuous credit checks on employees, a foreclosure may have adverse effects on a very important part of everyone’s life: getting or keeping a job. Short Sales are not recorded on a Credit Report and, therefore, do not specifically challenge employment.

#5 Deficiency Judgement. What rights does a lender have to pursue a deficiency balance in a short sale and in foreclosure?

There may be nothing more stressful than losing a home — other than the prospect of a lender demanding payment for amounts owed for the rest of a homeowner’s life, even after foreclosure. In a short sale, a homeowner has the opportunity to negotiate or completely eliminate a deficiency judgment. When a property goes into foreclosure, this right is forfeited in most states and a lender has the ability to pursue a deficiency judgment.

The Importance of Expert Guidance

Facing these challenges alone can be daunting and risky. As a CDPE, I have the training and resources to help homeowners navigate these challenging times effectively. My role is to provide solutions and education on how to handle real estate challenges in the face of financial distress, giving you the reassurance and confidence to make informed decisions.

Conclusion and Call to Action

Navigating through real estate challenges during financial hardship doesn’t have to be a journey you take alone. There are pathways to stability and solutions tailored to your unique situation. If you’re experiencing financial hardship, don’t wait. Contact me today to discuss your options and start your journey from hardship to hope.

If you would like more detailed guidance and personalized assistance, please text me at (407) 709-4961 or email me at hector.acosta@cbrealty.com and ask me for your free guide on effective communication with your lender during financial hardship.

Stay proactive and reach out for help today—you don’t have to face this challenge alone. For more information contact Hector Acosta, P.A., at (407)709-4961 or email me at hector.acosta@cbrealty.com.

Disclaimer: This report is intended for informational purposes only and should not be considered legal or financial advice. You should consult a qualified real estate attorney or financial advisor before deciding about your distressed property.