The consequences of a foreclosure are much more difficult for a homeowner, than if said homeowner can successfully negotiate a short sale. Here are some of the effects a foreclosure will have that a short sale will not:

• If you lose your home to foreclosure, you are not eligible for another Fannie Mae backed mortgage for five years. If you negotiate a short sale, you can be eligible after just two years.
• If you are an investor who loses a property to foreclosure, you are not eligible for a Fannie Mae backed investment mortgage for seven years. If you negotiate a short sale, you will be eligible after two years.
• If you foreclose, you will have to answer “Yes” to question C, section VIII of any 1003 application that inquires whether or not “you have had property foreclosed upon or given title or deed in lieu thereof in the last seven years?” No similar question exists regarding a short sale.

For more information about Kapolei Real Estate please contact John Riggins, Certified Distressed Property Expert.

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