Thinking of Walking Away from your Mortgage? Fannie Mae's Response....

By
Real Estate Agent with Elevate Realty Group NW by Keller Williams 200802165

Fannie Mae announced today policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure.

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.

"We're taking these steps to highlight the importance of working with your servicer," said Terence Edwards, executive vice president for credit portfolio management. "Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting. On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time."

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. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.

Troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, such as a loan modification, a short sale, or a deed-in-lieu of foreclosure. A borrower with extenuating circumstances who works out one of these options with their servicer could be eligible for a new mortgage loan in three years and in as little as two years depending on the circumstances

 

Here is the verbiage from the FN Bulletin:

Currently, the waiting period that must elapse after a borrower experiences a foreclosure is seven years. However, Fannie Mae allows a shorter time period – five years – if certain additional requirements are met (e.g., minimum down payment and credit score, and occupancy requirements).

These requirements are being modified to remove the five year option. Unless the foreclosure was the result of documented extenuating circumstances, which only requires a three-year waiting period (with additional requirements), all borrowers will now be required to meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae"

Don't miss the section that says borrowers who have extenuating circumstances may be eligible for new loan in a shorter timeframe.

 

Source:Mortgage News Daily

Fannie Mae

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Location:
Oregon
Groups:
Oregon Realtors and other Real Estate Professionals
Everything Oregon
Moving to Oregon
Portland Metro Real Estate
Portland Oregon Home Buyers and Sellers
Tags:
foreclosures
foreclosure prevention
walking away
losing your home
fannie mae
should i walk away
mortgage delinquincy

Spam prevention
Show All Comments
Rainmaker
1,025,654
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

As we all know the waiting periods change regularily.  They will get longer and then shorter.

Jun 28, 2010 07:12 PM #1
Rainmaker
519,287
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Molly ... Thanks for your post and getting out the info about Fannie Mae's decision that 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.  It's important for our clients to know about.  Best wishes.

Jun 28, 2010 07:19 PM #2
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
70,025

Molly LeBlanc

503-490-5229
Ask me a question
*
*
*
*

Additional Information