Foreclosure or Short Sale? 6 Reasons Why a Short Sale May Be Your Best Way Out

This will begin a 6 part series of the advantages of a short sale over a foreclosure. Here we go:

Reason 1
A home owner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.

A home owner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years. This means that you may be eligible to purchase a home again in 2 years!

An investor who allows a property to go to Foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.

An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

So who is this Fannie Mae anyway, and how come she wields so much power?

Well…The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression. The corporation's purpose is to purchase and securitize mortgages in order to ensure that funds are consistently available to the institutions that lend money to home buyers.[2]
As of 2008[update], Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac) owned or guaranteed about half of the U.S.'s $12 trillion mortgage market. (wikipedia).
So, these entities control about half of the mortgage market.

Next up… How do Short Sales or Foreclosures impact you ability to get a future loan with a Mortgage Company?