A hot topic surrounding short sales is the potential credit impact that will happen after short selling.
There is no doubt that a short sale will impact your credit. In fact, it's reported the same way a Foreclosure is reported on your credit report. Most of our short selling customers have either already stopped paying the mortgage or are just about to run out of cash and will have to stop paying at some point in the near future.
Why do a short sale instead of just letting it foreclose?
- Deficiency balance: In Florida the bank has the right to collect on the deficiency (amount owed vs amount the home sold for in a short sale or a foreclosure sale) for UP TO 5 YEARS after the sale happens! Ouch, that's a lot of time! So:
- In a short