Fannie Mae has announced a big policy change that will effect those who are considered Strategic 
Defaulters. With the decline in property values over the last few years nationwide, there is a new term in the Real Estate lexicon: Strategic Defaulters. Strategic Defaulters are often upside down on their mortgage, meaning they owe more than what the home is currently worth. Viewing the home as a bad investment, strategic defaulters choose to walk away from their homes even when they can afford the monthly payments. Fannie Mae has instituted a new policy to specifically address this type of homeowner.
Strategic defaulters who had the ability to pay but chose to walk away from their properties without working out an alternative with their current lender will not be able to secure a new Fannie Mae backed mortgage for a period of 7 years from their foreclosure date. Fannie Mae will also take legal action to recoup unpaid mortgage balances from borrowers who strategically default.
Fannie Mae says that the key to this policy change is encouraging homeowners to work with their current lender before walking away. Those who work with their lenders will have the option of working out alternatives such as loan modifications, short sales or a deed in lieu of foreclosure. A customer who works out one these options may be eligible for a new Fannie Mae mortgage in as little as three years. Fannie Mae says they will even consider two years with documented extenuating circumstances. Before instituting a strategic default a homeowner should carefully consider their options and the ramifications that come with this strategy.
Comments(3)