I believe most of you know about the new Fannie Mae regulations for borrowers who purposely default on their mortgages. If you do not, one is quite simple. If you “strategically default” on your mortgage, you will have a seven year ban on new Fannie Mae loans. They are using this as a means of detouring borrowers who can afford to make their payments, but choose not to. This is becoming popular amongst borrowers who owe more on their home than it is worth. On top of the seven year ban, according to an article on seerpress.com, Fannie Mae might start attempting to recover some of their losses through the court system.
I don’t know how most of you feel about this topic, but I agree with Fannie Mae. I know these are hard times and it must be very difficult to be “upside-down” in your mortgage, but I don’t think that give one the right to walk away. We are all facing the same difficult times and why should we, as taxpayers, homeowners, and citizens, have to pay for one’s strategic default. When someone defaults, it is a cost to all of us. The value of the nearby houses goes down, which is a strain on the community and can cause further defaults. The huge numbers of defaults also make it harder for everybody to receive credit, as banks need to become more conservative. Personally, I think Fannie Mae is well within their rights to try and recoup their losses, however, there must be a thorough investigation to see if these cases are actually strategic defaults. Otherwise, they will be punishing those who are already in over their heads.
What do you think? Leave a comment and let us know.