Think again! I’m sure in a moment of frustration one has considered leaving their current underwater home for the banks to “deal” with. The frustration and helplessness can be overwhelming, especially, at times when you cannot sell your home because you owe more than it’s worth!
An increasingly common problem plaguing society these days are homeowners that are so frustrated by the systems in place that they decide their “best and only” option is to strategically default on their loans. A strategic default occurs when a person who can afford to pay their monthly mortgage willingly defaults on their loan because they owe more on the home than it is currently worth. The homeowner in this situation simply just “walks-away” from the property for the bank to sell.
The Government, investors, and others – namely Fannie Mae have decided to take action to do something about this problem before it becomes an epidemic. Fannie Mae has provided many homeowners more incentive to think twice before simply walking away from their homes.
- Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure.
- Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments.
Fannie Mae is attempting to engage homeowners in a little open and honest communication with their respective lenders to find alternatives to foreclosures. If you have a true hardship you should contact your lender and ask for alternatives that include a loan modification, preforeclosure / short sale, or deed-in-lieu of foreclosure.
What are some hardship examples? I thought you’d never ask.
- Adjustable Rate Mortgage Reset- Payment
- Loss of Job
- Reduced Income
- Failed Business
- Job Relocation
- Death of Spouse or Co-Borrower
- Marital Separation
- Military Duty
- Reduced Income
- Medical Bills
- Damage to Property (natural disaster or unnatural)
For the full Fannie Mae article visit: