Recently talking with a mortgage broker I was given a short but important lesson about the differences between a foreclosure and a short sale. Here are the main points:
- A foreclosure is reported on your credit report as opposed to a short sale.
- A foreclosure will prohibit you from buying again until you pay off any judgements and tax liens reported on your credit report and in a short sale you still have to pay off the tax allocation but it helps build your credit.
- A foreclosure causes a psychological stigma as opposed to a short sale.
Do you have any other differences between a foreclosure and a short sale? Let us know.
1 comment:
A short sale also produces a 1099 to the seller. If the bank eats $50,000, the seller has to pay taxes on that debt forgiveness.
Post a Comment