In a press release announcement this week Fannie Mae has taken a sharp stance against those borrowers that walk away from their obligations and pursue what the industry has termed a Strategic Default. Fannie Mae would ban those borrowers from obtaining a new Fannie Mae backed mortgage for 7 years and take legal action to pursue deficiency judgments to collect outstanding mortgage debt against those in states that allow deficiency judgments. In that same statement Fannie Mae also expressed that some distressed borrowers who seek work out options with their servicers could be eligible for a new Fannie Mae backed mortgage in 2 to 3 years.
It has been interesting reviewing blogs and conversations on this subject. The feedback is mixed. There are those folks out there that feel that if the banks can be bailed out, so should consumers. Others are in full support of the measures that Fannie has initiated. Many are outraged at the lack of personal accountability and the casual attitude of those that choose to just walk away from their mortgage obligations.
I personally could not walk away from an obligation, regardless of the market, with the means to perform. To me there is nothing strategic about breaking a promise. The implications are far reaching. Tax payers ultimately pick up the bill for both bailouts. I help many families in distress that have hardships and are struggling to make ends meet. I advise these families to seek help and work with their servicers to modify, refinance or short sale their homes, depending on their specific situation. Please do not confuse hardship with a strategic decision. Let me know your thoughts on this new initiative from Fannie Mae…
Northern Virginia REALTOR®
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