There’s a huge trend growing where homeowners, who are perfectly capable of paying their mortgages, are walking away from their homes because the home price has dropped to much. And Fannie Mae (NYSE: FNM) has had about enough of it.
In a press release hot off the wire, it was announced that Fannie Mae is adopting new policies to discourage people from leaving their homes.
Here’s the bottom line. Homeowners who have the capacity to pay their mortgage, but walk away without trying to work out a solution, will be barred from getting a Fannie Mae-backed mortgage for seven years—regardless of credit.
So why is Fannie Mae doing this?
“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,” Terence Edwards, executive VP for credit portfolio management said. “We’re taking steps to highlight the importance of working with your servicer.”
And that’s not all.
Fannie Mae has also decided to take legal action to recoup outstanding mortgage debt from borrowers who fit in this category—provided the jurisdiction allows for deficiency judgements.
The company plans to make an announcement in July, which will instruct its servicers to begin monitoring delinquent loans that fall into this category.
The Fannie Mae website provides a quick lookup tool, which allows borrows to see if their loans are owned by Fannie Mae. Go here for the tool (new window).
Sources:http://www.prnewswire.com/news-releases/fannie-mae-increases-penalties-for-borrowers-who-walk-away-96996494.html
http://www.fanniemae.com
My name is Jason A. Martin. I'm an investor/trader, financial writer and entrepreneur. This is my blog. I also run a social media integration & cross-media design company. If you'd like to follow me on twitter, here's the link: Jason A. Martin
Add RSS feed to your RSS reader
Subscribe to Financial Rebel by Email
Follow Jason A. Martin on Twitter: Jason A. Martin
Email: jmartin@jasonamartin.com
My name is Jason A. Martin and this is my investment blog. Back in Jr. High School I fell in love with an electrical wiring company's stock on Wall Street. After following the stock daily in the papers—the Internet wasn't around back then—I sent them a letter and they sent me back all sorts of wonderful information about their company.
In High School, we had a stock market contest. All the kids were picking companies that made stuff they consumed. When I announced my beloved company, I was laughed at. Little did they know that my company was going to be the subject of a takeover soon.
Long story short, I won the contest and have made money in the stock market, through real estate investing, currency trading and so forth.
I hope you enjoy Financial Rebel. If you do, please leave your comments and share this site with those you know.
Jason
2 Comments
Talk of a gov’t bailout for Fannie Mae (http://www.fanniemae.com) is ridiculous. They should give that money to consumers.
Testy test
6/23/2010
They shouldn’t be spending it at all. We’re broke. Our grandcdhildren’s grandchildren are broke.
Tony Pepperoni
7/13/2010
Leave a Reply