When the house is unaffordable,  homeowners often look to a short sale or deed in lieu in the belief that avoiding foreclosure means avoiding the credit score hit.  Not so.

Sharon Epperson’s bit in USAWeekend today points out that a deed in lieu or a short sale will likely be reported as “not paid as agreed.” Put another way, you don’t get any points for trying to make the lender’s life easier.

This reinforces the pitch I often make that, if losing the house is inevitable, live there as long as possible for free.  Those months without mortgage payments and property taxes may be the only return you get on your housing investment.  Don’t lose out on that “return” by leaving earlier than you have to.