FORECLOSURE VS. SHORT SALE

FORECLOSURE
ISSUE
SHORT SALE
For the next 7 years you will be required to disclose that you have been foreclosed upon in mortgage applications. This will assuredly impact your eligibility and interest rate.
Future Loan
You will not have to disclose a foreclosure because you avoided it by completing a Short Sale.
Your credit score can be lowered substantially for several years if you allow a foreclosure on your record
Credit Score
While a Short Sale can impact your credit score it is generally not a substantial as a foreclosure.
A foreclosure remains as a public record on your credit history for as long as 7 years.
Credit History
The words “short sale” does not appear on your credit report. The sale is typically reported as “ paid in full”, “ paid settled”, or “ paid for less than agreed”, …
A foreclosure is a challenging issue for employment that requires security background checks. A security clearance may be revoked or denied when you permit a foreclosure on your record
Security Clearance
A Short Sale in and of itself does not challenge most security clearances.
Employers can request to check the credit of their employees. If you are an employee in a sensitive position you could be reassigned or terminated.
Current Employment
A Short Sale in and of itself would not be a challenge to current employment.
Many employers are actively requiring credit checks on job applicants. A foreclosure can be detrimental for an applicant and can challenge employment.
Future Employment
A Short Sale in and of itself would not challenge future employment.
Depending on the character of the loan that forecloses on you, the lender may be permitted to seek a deficiency judgment against you.
Deficiency Judgment
In a Short Sale you can negotiate with your lender to fully discharge the loan at the time of sale.
 
Lenders are required by law to file a form 1099A which you may have to report as income for tax filing purposes
Taxes
Lenders are required by law to file a form 1099C which you may have to report as income for tax filing purposes