Short Sale vs. Foreclosure?
From the beginning of three downturns in the housing market, the term short sale started to appear. At first, Realtors tried to steer clear of these listing as they rarely turned to sales. Now the term has taken on more respect with real estate professionals, as the banks and Realtors are understanding the process of a short sale and the advantages of a short sale to both the bank and the seller.
In that regard, Fannie Mae will be shorting waiting periods for a new loan for individuals who have given the deed back to the bank (deed in lieu of foreclosure) because of financial problems or have done a short sale. You may not have to wait the typical four or five years to qualify for financing to purchase another house.
It is now likely the wait could be as little as two years. A bulletin to lender’s from Fannie Mae said it was relaxing the rules for those individuals who participated in a deed in lieu of foreclosure or a short sale. The new guidelines are to take effect July 1, 2010.
Also, it was reported earlier that credit scores would suffer a deduction of 250 points for a foreclosure and a 150 point deduction for a short sale. This is yet another reason to consider a short sale.
Visit the LA Times for more information.
Tags: Gary Carlson, Palm Springs Market Watch, Palm Springs Real Estate, Prudential, The Moore Carlson Group
