Short Sale vs. Foreclosure - A simple chart of basic differences.

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Short Vs. Foreclosure

Issue	Short Sale	Foreclosure
Purchasing a new home with a Fannie Mae backed loan	An individual can be eligible for a Fannie Mae Backed Loan after 2 years.	Per Fannie Mae; an individual that forecloses must wait 5-7 years and maintain at least a 680 FICO score in the sixth and seventh year and pay a minimum 10% down on the future home purchase.
Receiving a loan with any mortgage company	There are no application questions regarding a past short sale.	A 1003 application asks if an individual has had a foreclosure or deed-in-lieu in the past seven years, which will affect rates.
Credit score and history	Short sales may still show up on a credit report as a "Pre-Foreclosure in Redemption" status and can result in a credit score reduction of often half to a third of the loss in a foreclosure.	A foreclosure may lower a credit score anywhere from 250 to over 300 points. Per Fannie Mae; an individual that forecloses must wait 5-7 to purchase another home.
Employment	A short sale has much less impact on employment, if at all.	Many employers require a credit check on a new application. A foreclosure can have a detrimental effect on an individual getting a job.
Deficiency Judgment	A short sale is negotiated for a no-deficiency judgment.	In states allowed, the bank has a right to pursue a deficiency judgment. A judgment can freeze your assets and bank accounts.