Monday Market Myth: FICO with Short Sales & Foreclosures

Myth: A short sale seller will have less affect on their FICO credit score compared to a foreclosed homeowner.

False: Over the years, research has shown that the FICO score of a short sale and foreclosed owner has almost the same impact.  Both are considered “failure to pay as agreed,” so one versus the other is not better for a homeowner on the sense of credit score.  However a short sale seller can purchase quicker than a foreclosed, a future lender would take into consideration the reason for the short sale.  When considering foreclosure, a distressed homeowner should discuss with a CPA, real estate attorney, and CDPE Realtor, such as Kristen Jurevch, the alternatives and affects of a foreclosure such as: loan modification, deed in lieu, short sale, etc.

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