Long Beach California Real Estate Loans

Long Beach, CA. There are many consequences to having a foreclosure or opting for a short sale.  A foreclosure is when you let the property, "go back to the bank," a short sale is when you sell the property for less then what is owed on the property.  The following summarizes the potential effects to the home buyer:

1. Sercurity  Clearances  If you are considering a foreclosure, this is a very important factor to consider if the current home owner is employed as a civil servant.  It is a most serious issue if you are employed as a Federal, State, or Municipality.  Especially, if the client is in the Military or Police Department, Central Intelligence Agency, Security, or any other position that requires some type of security employment.  In almost all cases, the security clearances will be revoked and the position could be terminated.  Conversely, a short sale does not challenge security clearances. 
2. Current Employment  While considering foreclosure vis-à-vis retaining your employment, it must be noted that depending on how sensitive your position is, employers do have the right to consider termination if you opt for foreclosure wherein if you go through  a short sale, it will not be on your credit report and; therefore, will not be a challenge for your continued employment.
3. Future Employment  Many employers require stiff back ground checks on all job applicants.  A foreclosure is one of the worst things that can be noted on your credit report wherein if you had a short sale, future employers will not be aware of the transaction unless you disclose it.
4. Deficiency Judgment  In 100% of foreclosures(except in those state wherein there is no deficiency) the bank can pursue a deficiency judgment.  In some successful short sales, it is possible to negotiate with the lender not to go after the home owner for a deficiency judgment.
5. Deficiency Judgment(amount)  In case the property does go through foreclosure in a State that can go after a deficiency judgment, the property will have to go through a long and extended REO process; thus, increasing the losses to the bank and increasing the amount of the judgment against the home owner.  However, if the home owner goes through a short sale, the property will be sold faster and the judgment will be normally less then if you went through a foreclosure.
6. Future Fannie Mae Loan- Primary Residence  If a home owner loses a property to foreclosure, he will not qualify for a new mortgage with Fannie Mae for up to 5 years, but if the home owner successfully negotiates a short sale, this time can be reduced to 2 years from the time the short sale closed.
7. Future Fannie Mae Loan-Non Primary  Residence  On future loan applications, after a foreclosure, it must be noted that there was a previous foreclosure on the 1003 form.  This could affect what interest rate that you get on your new purchase.  A short sale question is not asked on the current 1003 forms; therefore, you will not pay a higher interest rate on your future mortgage.
8. Future Loan with another Mortgage Company
9. Credit Score  With a foreclosure, your credit score could fall between 250 and 300 points!  This could affect your score for as long as three years.   A short sale will definitely show late mortgage payments, but this normally will only lower your score 50 to 100 points and will only negatively impact you for 12-18 months.
10. Credit History.   Foreclosures  will be reported for 10 years on your credit report.   Short sales will not be reported on credit history at all, the loan shows, "paid in full."

Kirk Mulhearn works in the Long Beach area of Southern California and is a Certified Distressed Property Expert, you may contact him for a free consultation on the disposition of your property at 866-961-8042 ext.110 or contact him directly at kirkmulhearn@gmail.com,  Mr. Mulhearn's blog:  www.longbeachrealestateandloans.com  contains information on distressed properties.