Some of the laws to be considered are like Senate Bill 931 which stated that lenders who have
agreed to a short sale would not have the ability to obtain a deficiency judgment against the seller after the
short sale was completed. The law applied only to first mortgage loans secured by one to four residential units.

Senate Bill 458, will extend the same protection to any secondary or junior loans involved in the transaction. This means, after agreeing to the terms of the short sale, secondary or junior lien holders no longer have the right to pursue a deficiency judgment and the seller will no longer be required to owe or pay for a deficiency in a short sale.

According to FICO, a consumer with a starting FICO credit score of 720 will see his or her score drop by 130 to 150 points after a foreclosure. By comparison, that consumer's score will drop 95 to 115 points after a short sale. FICO spells out this and further mortgage delinquency scenarios in a blog post.

Minimum waiting periods before borrowers are eligible for a Fannie Mae loan after a foreclosure or short sale also favor short sales somewhat. Homeowners who went through a foreclosure and did not strategically default have to wait three years, compared with two years, under certain circumstances, for those who went through a short sale.