To clarify: A short-sale is when a property owner owes more than the property is worth. A foreclosure is when the bank takes back the house from the previous owner, usually due to lack of payments, but could be for many reasons.

    Many home owners have found themselves in a situation where they are late on their payments. Regardless of the reason, whether laid-off or health scare, if a home owner continues to default on their payments, then there are certain repercussions that have to be dealt with. The best scenario would be to 'catch up' on the late payments and for everything to be current without debt. However, this is sometimes easier said than done. If a home owner is in default and can see no way of catching up the payments, then a crossroads usually presents itself. . .Foreclosure or Short-Sale?
    
    Effect on Credit
Both a foreclosure and a short-sale will have a detrimental effect on a credit score. The main difference is the recovery period. A foreclosure will have a much longer lasting effect on credit scores making it extremely difficult for an individual to obtain financing on anything credit based, a TV from an electronic store, a department store credit card, and especially a home loan. Typically, for credit to recover from a foreclosure it would take anywhere from 5-7 years. On the other hand, a short-sale can usually be recoverd from within 2-3 years. In some cases, with people who have shown a good credit history for the 12 months after their own short-sale, then the banks and lendors will extend credit once again. 

    Judgement Vs Settlement
After the long foreclosure process, the court will issue a judgement in favor of your lendor which, in certain scenarios, he/she may have the option to attach that judgement to seek the lost payments i.e. garnishing wages. Not to mention the judgement goes on public record and your credit report. A short-sale is a negotiated settlement between home owner and lendor, that's where I come in to help, I will negotiate for you and in doing so attempt to release any and all deficiencies before the short-sale is completed.

The foreclosure proccess is a long and tedious proccess. If you have any questions please don't hesitate to call or email.