I know foreclosure and bankruptcy has an effect on your credit, but does a "short sale"?

Short sales pretty much suck and only help the bank.

It will effect your credit. Also, a short sale is usually not even possible until the house has been listed at market value for the last 3 months. And I'm assuming, because you are even looking at this option, that you will not be paying the mortgage during that time. So your credit will also take a hit there.

ALSO, selling in this market, even at a loss is still difficult. Took the woman in detroit who was selling her house for $1 nineteen days to find a buyer.

ALSO, in most states, the bank can still come after you for the difference.

So all you are doing is allowing the bank to avoid the foreclosure process and selling the house themselves. But its less embarrassing then a foreclosure.

ALSO, if you had an 80/20 or any second mortgage on the home, the bank will not agree to a short sale because a lien will be placed on the home from the other creditor.

A short sale will harm your credit about the same as will a foreclosure. The point here is that you failed to honor a financial responsibility. You asked the bank to take a loss because you owed more than your house could sell for.

Banks seem to prefer short sales because the bank saved the monetary expense of processing a foreclosure action.

Yes....a short sale is a huge negative on your credit report.

# Short Sale

The effect of a short sale (providing the sellers are more than 59 days late) on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.

Catherine Coy, a mortgage broker in southern California, agrees. "The effect on a consumer's credit report -- foreclosure vs. short sale -- is the difference between being hit by a train or a bus," says Coy, speaking about borrowers who are a few months in arrears.

i'm style of interior the comparable project. extremely our strategies count completely from the economic company or the corporate who owns your loan. it extremely is not as much as you to return to a determination. first element you will desire to do is you will desire to permit be conscious of your lender approximately what you're dealing with then they're going to supply the 1st step, they're going to deliver you a kit it extremely is precious to fill out with all your suggestion, in that kit they already supply the posible possibilities obtainable to your particular case. they're going to come to a determination what style of help they are able to grant to you and this may well be consistent with what contemporary you're which includes your money. i think of what we hear at present everywhere is the word very own loan substitute it extremely is the desperate attempt of assets proprietors to maintain up with the money. The economic company will confirm what style of substitute they're going to assis you with if any. If not something extremely works and you initiate getting at the back of interior the money you will desire to besides seek for for a actual state agent as immediately as you get at the back of on the 2d charge considering the undeniable fact that will boost your probabilities of being allowed a quick sale yet while the fast sale does not artwork out then foreclosure is the only decision left, the two certainly one of them are very damaging to the credit, a foreclosure extra advantageous than the fast sale nonetheless. financial disaster in financial disaster 13 is obtainable in this technique while your purpose is to objective to maintain the homestead and get a deal from a financial disaster court docket or if a house being placed to foreclosure and the quantity recovered is a good distance under the quantity the valuables develop into valued at times they'd pursue debtors for the deficiency then financial disaster interior the financial disaster 7comes in handy. extra remark financial disaster is going to the credit record and at times would desire to steer away from one to get a activity on the grounds that employers verify the credit record at times financial disaster and foreclosure stay interior the credit record for 10 years.

The first two respondents are exactly right.