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If you are having difficulties in paying your mortgage and have considered walking away and letting the bank foreclose on your home than you need to seriously consider a <a href=http://ekvfinancial.com/real-estate>short sale</a>.

In a foreclosure your home is either sold at auction to the highest bidder in a trustee sale or a judicial foreclosure. If there are no bidders the home automatically reverts back to the lender. Either way you lose your home and will need to vacate the premises shortly thereafter or be forced out by local law enforcement.

In a short sale you sell your home as you would in a normal sale. Although your lender may accept less than what you owe, the transaction will proceed like a normal real estate listing. You will get to work with your real estate broker, your home will be seen by potential buyers and you will finalize the sale with either an escrow or an attorney.

A foreclosure creates major damage to your credit report and will show on your credit history for 7 years. You will not be able to qualify for a mortgage from 3 to 5 years with most lenders. In a short sale you may have some credit damage but its significantly less than having a foreclosure on your record. As of this writing you may qualify for a conventional within a reasonable amount of time.

While either a foreclosure or a short sale can eliminate unwanted debts they both have the potential to create liability. A foreclosure has tax implications which means that the lenders loss may be reported as income to you. Tax laws have been modified in recent years to address these issues and its always a great idea to consult a tax specialist or an attorney. Out of the two a short sale that qualifies for H.A.F.A. Or Home Affordable Foreclosure Alternatives does not create any liability to the borrower to the<a href="http://ekvfinancial.com"> lender</a>if the elect to sell through a short sale instead of a foreclosure.