Fannie Me is toughening its stance on going after borrowers who walk away from their homes they can still afford. The strategy of walking away from the home due solely to it being underwater is known as strategic defaults, and Fannie Mae (who along with Freddie Mac back more than half of all mortgages) is cracking down on the practice.
DS NEWS Article:
DS News recently reported… "Under these changes, 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 day of foreclosure. In addition, Fannie Mae said it will take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments." Nevada is a deficiency judgment state.
Fannie Mae or Freddie Mac’s policies often are a guiding post for other servicers and lenders given their size in the market. This new policy in addition to the recent policy change allowing for a new purchase within 2 years of completing a short sale, makes short sales the best option for truly distressed homeowners.
DS NEWS Article:
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