Effective Demand,
If you look around more than a couple minutes online you will see alot of peple claiming the damage to ones credit is just as bad with a short sale.
All your comments about the recourse/non-recourse, securitized/non-securitized are accurate. However, when you do a short sale you can give up the non-recourse nature of the loans which does not specifically cover a short sale but rather a foreclosure. All the issues regarding portfolio/securitization only cover how quickly the short sale gets done.
The question I was never quite able to put a figure on is what happens to one’s credit when a large debt is written off and I fully expected 100 to 200 points of FICO damage, maybe more.
I have a client whose scores dropped almost 150 points because a department store bill for about $75 went to an old address for 3 months (dropping from 815 to 670 recently). This is probably gonna make some folks unhappy around here who have never gotten debt relief anywhere near this level. Quite frankly, I am shocked myself. Their scores today (they sent me a printout) are 748, 748, 770. Those are damn good scores and still prime A+ quality borrowers.
