Advice on short sale when compared to foreclosure - The Bills.com Blog

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Advice on short sale when compared to foreclosure

Wednesday, Jan 16, 2008

Question: Does short sale affect your credit score the same as a foreclosure?

Answer: A short sale is a process in which the mortgage holder agrees to accept less than the balance owed on the mortgage at sale to prevent foreclosure. The lender would much rather see you sell the property than be forced to take the property through foreclosure, as foreclosure is a costly and time-consuming process.

A short sale will appear "Paid", but there will be a note saying "account legally paid less than balance on account." It will affect your credit score somewhat. It's not quite as bad as a full foreclosure,
but a short sale is still going to give your credit file a pretty serious hit in terms of score. It indicates that you took on a debt which you did not honor.

I found a good article online
at About.com which discusses the short sale process and the associated pros and cons.

I hope the information I have provided helps you Find. Learn. Save.

Best,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!

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