Difference Between Short sale and Foreclosure:
Foreclosure has become of the most common phenomenon in the last 2 years. Millions of people have faced foreclosure as they do not even know wheat to do. Many people do not even know the difference between short sale and foreclosure. A short sale is when the lender agrees to take less than remaining loan balance.
In different situations the lender agrees for a short sale. If the lender sees that the borrower cannot pay off his loan and is in default already then he may agree for a short sale. Thus the lender can avoid the expenses of foreclosure.
Foreclosure is the worst thing and neither lender not buyers want foreclosure. Lenders don’t want foreclosure as this is a very expensive and time consuming process. If any buyer faces foreclosure then we all know that can hurt his credit score negatively and he may not be able to get a home loan in coming 5 to 7 years.
Foreclosure seems very insulting to some people and on above all that you are losing your dream home. In short sale you cannot protect your dream home but the short sale does not affect your credit score as bad as a foreclosure and if the lender agrees for the short sale then he will not even claim any deficiency judgment.
There are many other options to avoid foreclosure link Loan modification, Forbearance, Refinancing, Reinstatement or any easy repayment plan etc. short sale should be your last option to choose. If no options help you out then you can think about short sale.