The economy in a tailspin, with so many unemployed and underemployed, so we have tons of defaults every month. So what about those individuals who are way upside down on their mortgage who just want out? Some of these individuals are now engaging in what I call a "strategic default". They could barely afford to keep the mortgage paid but for some reason it is not in their best interest. They simply opt out.
The consequences could include a punitive period of SEVEN years before the individual can once again get a new Fannie Mae mortgage. The criteria for imposing this is a little vague as to what is optional and what is brought about by necessity. For example following a serious illness or a nasty divorce this would probably not apply and the time period would be three years instead. However, if it is clearly a voluntary business decision, the seven years is hanging over your head as a possibility.
Some people think to voluntarily default, they are breaking the law. This is certainly not a criminal matter. It is a contractual matter. That is why there is a clause in the mortgage paperwork concerning te matter of defaulting. If your finances put you where you feel helpless, you may have few other choices. However, real estate agents ARE NOT ATTORNEYS! So do not ask your agent for advice on this type issue. The small price you pay for legal advice is well worth it in most cases--this one is not an exception.
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