Walking Away From Your House? Fannie Mae Is About to Fight Back

Has your mortgage got you feeling like you are trying to get away from a bad storm?  If you can still afford to pay it, you may not want to walk away.

Fannie Mae plans to fight back at homeowners who are able to pay their mortgage but decide it’s not worth it.  If you have been considering this option, Fannie plans to go after you in court to limit your access to a home loan for seven years.

Fannie is going to have the companies servicing its loans recommend when it should pursue a definciency judgment

– big words for a court to demand that you pay any remaining unpaid portion of your loan.

Fannie Mae is now calling “walkers” a strategic default.  Basically, if you can pay your mortgage but the mortgage is more than the value, Fannie Mae wants recourse.

I read and keep up on real estate news in San Diego for San Diego real estate and across the country for anything affecting us, and in researching this new Fannie Mae step I found out that this is already in place with Freddie Mac, who blacklists strategic defaulters for five years. 

But wait!  More serious actions may be in our future if legislation pending in Congress imposes a lifetime ban on FHA loans to borrowers determined to have made a strategic default.  That will really hurt since FHA allows you to bring in only 3.5% as a downpayment.

It’s hard to believe that people are walking away from their homes after a lifetime of homeownership as the path to wealth, however nationally foreclosures keep going at 2.5 million per year.

Fannie Mae and Freddie Mac’s new policies are designed to prod homeowners into looking into short sales instead of walking away.

Stats now show that if the home’s value is at least 25% less than the loan amount, they are more likely to walk away from the big storm that is their home.

Fourth quarter of 2008 strategic defaulters accounted for 18% of all homeowners who were 60 days past due on their loans.  In March of 2009 31% nof foreclosures were descrived as strategic by the homeowners themselves.

If you are here in San Diego, right now is the perfect time to look into the Keep Your Home California program that will be in place Nov. 1.  When you walk away from your home, everyone around you suffers to.

The Keep Your Home California program will have $700 million in place to help you out, click here to see how.  You won’t need to walk away from that stomr, the sun will come out soon.