25 June 2010 ~ 1 Comment

Fannie Mae Increases Penalties for Borrowers Who Walk Away

Fannie Mae Loans

Fannie Mae PenaltiesFannie Mae has decided to drop the hammer a bit on homeowners that are ‘strategically defaulting’ on their home loans.  This is not very surprising actually with people walking away from their home at a record pace.

The word from Fannie Mae is that you will be BARRED from obtaining a Fannie Mae backed loan for 7 years if you do not attempt to modify or use other methods of home retention or work out plans with your lender.

In addition, people that live in jurisdictions that allow deficiency judgments may also find themselves perused after walking away.

The moral of the story?  TRY AND WORK OUT YOUR HOME LOAN!!!

The reality is that you may be able to adjust your payment to less than what you would pay for rent.  It is worth the time and effort to try and make it work.  If it doesn’t end up coming together then at least you tried and can still be eligible for a Fannie Mae loan in just two or three years instead of seven!

Tags: Fannie Mae, home loans, loan modification, strategic default

Written by: Jacqueline Cliff

  • http://www.sacramentorealestateviews.com Rob Saxe

    In my market, it’s not worth the time and effort to work it out as the values here, the Sacramento, CA region, will not be coming back anytime soon making it a bad financial decision to stay in the home.
    Values have dropped more than 50 to 60% and this is a decision companies like Fannie Mae make all the time.
    Let them penalize…you’re still better off, in my market, to walk.