A short sale is a foreclosure in the eyes of creditors
I believe you are wrong on this. A foreclosure is much worse as far as its effect on credit ratings and the ability to get a mortgage in the future than an approved short sale.
A short sale typically means the mortgage lender takes a loss but a much lesser loss than if the home owner simply walks away and the property goes into foreclosure. To qualify for a short sale, the home owner has to work with very closely with the lender, have a previous record of timely payments, actively work to sell the property for the highest amount possible and meet certain eligibility requirements, i.e, be out of work or unable to meet the payments and not qualify for a debt restructuring. All that has to happen in a foreclosure is the homeowner stops making payments and or abandons the property and simply walks away.
In a short sale, the lender get’s a substantial amount of the money owed, but in a foreclosure, the lender is stuck with the property and all the carrying costs and no matter what shape the property is left in, until the property eventually sells for; typically for much less than and for a longer period of time that what a short sale would bring.
Big difference.
Came through with home and credit rating intact by the grace of God.