What's worse, foreclosure or narrowly-averted foreclosure?

[Anonymous]

An article in today's Washington Post indicates that, in terms of damage to the credit score there is not much difference between a foreclosure, short sale and deed in lieu of foreclosure.  What about a foreclosure suit that is dismissed when repayment terms are arranged?  It's still a default isn't it?  I'm guessing it's just as bad for the credit score.  Am I wrong?  (this happened to me but I've since been current with the mortgage for 2 years)

Thanks

TU 625

EQ 647

Goal 680-700

[llecs]

They are scored pretty much on par. What you'd want to look for are two things: the lates and the severity of those lates and any comments that report within the TL. If there are any 90 or 120 day lates (or worse) reporting, then its scored as a major derog very similar to a repo, a foreclosure, a collection, etc. Any comments can play into that too. The advantage of avoiding a foreclosure, short sale, etc., is that after 7 years, those lates will have completely disappeared and the mortgage would report as a positive account. A foreclosure would end up deleting at the end of 7 yrs and you could lose valuable history and can actually hurt your scores even more.

[bruiseviolet]

I'm not sure on the credit scores and how it affects them.  A family member of mine is going through a foreclosure and decided to do a short sale so that it wouldn't hurt her score as much- however from what i've read- they both hurt your score the same.  The only other difference, is that with a foreclosure the bank can come after you for the difference in what you owed and what they sell it for.  On the other hand with a short sale- the bank is agreeing to take the lesser amount and won't come after you for the difference in sale price vs. what you owed.  That's my understanding of it at least.