Santa Cruz Foreclosures vs. Short Sales: The Consequential Facts

Posted by Lauren Spencer on Saturday, October 17th, 2009 at 3:10pm.

Santa Cruz foreclosures are a sad fact of life.  The truth of the matter is that, for many, even loan modification isn’t an option.  When faced with foreclosure or short sale, how do you decide which is best?  While short sales have been pushed by many as a viable option, it’s hard to know what’s best for you. 

Here are some facts about the consequences of both:

Your Credit

While both Santa Cruz foreclosures and short sales will affect your credit score, the differences are wide.  A foreclosure can affect your score for as long as three years or more, and lower it as much as 300 points.  The foreclosure can remain on your public history for over ten years.

However, only late payments show on your credit with a short sale.  Your score can drop as little as 50 points and be affected for as short as one year.  In addition, it isn’t reported on your history; it will show that the mortgage was settled and paid in full.

Your Job

On its own, a short sale generally doesn’t affect your employment.  However, a foreclosure is a different story.  Some employers regularly check their employees’ credit records.  As well, many require credit checks for new hires.  A foreclosure on your record can jeopardize your current position or future opportunities, as well as cause the revocation of a security clearance.


In the event of a foreclosure, many banks have the right to try and get a deficiency judgment, stating that you have failed to pay the entire amount of the mortgage.  With short sales, however, lenders will normally agree to give up the right to that judgment and put it in writing.

Lastly, keep in mind that Santa Cruz foreclosures generally close below the price they would get from a short sale, so the remaining balance might be significantly higher with a foreclosure.

If you want to stay out of foreclosure through short sales, I can help.  Call me at 831.662.6522 or email me at for more information.



1.  Loan modification

2.  Credit checks for new hires

3.  Deficiency judgment

About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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