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You will be ineligible for a government insured loan for 5 to 7 years (only 3 to 4 years in a short sale).
You always have to disclose that you had a foreclosure on any mortgage application and many job applications. You will also be required to disclose a deed in lieu of foreclosure and a short sale. A short sale gives you more control of the outcome and is seen as less damaging.
The foreclosure will significantly lower your credit score.
Many employers run credit check on job applicants.
A foreclosure can cost your current job or prevent you from getting hired.
Many jobs and professions require a security clearance. A foreclosure can jeopardize your security clearance.
You may face a potential deficiency judgment. If you are foreclosed the deficiency judgment will be larger than if you complete a short sale. And in a properly negotiated short sale the mortgage lender will waive their right to pursue a deficiency judgment against you.
There can be a potential tax liability as the unrecovered debt is considered taxable income. In a foreclosure it is not just the mortgage amount but also the court fees, attorney fees, house maintenance fees, etc. that will accumulate against you.
I have helped approximately 100 homeowners avoid a foreclosure by successfully completing a "short sale". A short sale can be complicated process that may involve more than just one mortgage. I have helped people with multiple mortgages, IRS liens, code enforcement liens, and even vehicle liens.
Jack Lara, Broker-AssociateBetter Homes & Gardens Real Estate Main Street Properties 1313 Creighton Road Pensacola, FL 32504