The Affect Of A Short Sale On Your Credit in 3 different situations:
1. If the lender chooses to sue the borrower for the difference of short sale, and the homeowner cannot pay, a deficiency judgment would appear on the homeowner’s credit report, negatively affecting the homeowner’s credit.
2. Often, the bank chooses not to sue. Even when the bank chooses not to sue, the foreclosure can end up showing up in credit checks because it is a public record.
3. If the property owner needs to take a new loan from a bank in order to make up the difference from the short sale, most likely the new credit score will not be drastically different than the property owner’s credit score before the short sale.
My friend took a new loan after the short sale during the last housing down time market. It did not impact his credit at all.
