Home owners who walk away from their homes, even though they can actually afford the mortgage may be in for an unpleasant surprise, when they go to purchase their next home. Earlier this month the house of representatives passed a bill barring "strategic defaulters" from obtaining an FHA backed mortgages and now Freddie Mac and Fannie Mae are also cracking down, by not allowing these types of borrowers to obtain a loan for 7 years.
A real estate research firm: Realty Trac estimates that approximately 3 million home owners will get foreclosure notices this year and that over a million of those will actually get foreclosed. There are currently over 11 million homes "under water" and predictions are that there could be as many as 21 million over the next 3 years.
With this many people with homes that are worth less than they owe, many are choosing to just bail, rather than continuing to pay their mortgage, and some speculate the number of borrowers making this choice, may once again exceed 1 million borrowers, over twice the number for 2008 and 4 times the 2007 figures (according to Experian.)
Reports I've read also indicated that Fannie Mae could pursue deficiency judgments more often in the future, so walking away, when you don't really have to (strategic default) may not be a viable option much longer.
My advice is be cautious if you are considering just walking away from your house, and make sure you check with a knowledgeable real estate attorney as to the laws in your state. You may want to consult a real estate professional experienced in short sales and foreclosure avoidance as well as your local non-profit housing agency, which the banks are required to communicate with to try to find alternatives to foreclosure for home owners in trouble.
Explore all your options, or you may be just dreaming of your dream home for about 7 years. 7 years can be a long time....look before you leap.
Comments(4)