Strategic Mort. Default Issues
Date: Fri, 08/27/2010 - 07:18
Submitted by Debt Free to Be
on
Fri, 08/27/2010 - 07:18
Total Replies: 1
Today in the Realtor Magazine there is a paragraph on the new Fannie Mae rules on strategic defaulters.
FANNIE MAE TAKES AIM AT STRATEGIC DEFAULTS
"Borrowers with a Fannie Mae backed mortgage who engage in a strategic default won't be eligible for another Fannie Mae backed loan for seven years, the secondary mortgage market company says. Fannie also will seek deficiency judgements against borrowers if allowed by state law. Fannie in late July was writing full blown instructions to servicers detailing its new policies. Strategic defaults are defaults by borrowers who have the capacity to pay but don't, or who don't complete a workout alternative in good faith. Such defaults have been growing among underwater borrowers."
I can safely say that Freddie Mac will follow suit. They always go hand in hand on all rulings so they are probably working on their instructions as well. Most people think that they can get a mortgage 3 years after a foreclosure. Now they will have to prove they were not a strategic defaulter. So make sure you document your mortgage default and never lose those papers. This would be thins like unemployment insurance letters stating you are on unemployment or anything else that would prove your financial inability to pay your mortgage payment.
A lot of states don't allow for deficiency judgements on first mortgages, but most do allow them on any non-purchase 2nd mortgage. So you are at risk if your 2nd was taken out after you moved into the house.
I'll let you know as soon as I see the new rules and how they are going to be determining this. But the lawsuits for the deficiency judgements have already started in some parts of the country.
FANNIE MAE TAKES AIM AT STRATEGIC DEFAULTS
"Borrowers with a Fannie Mae backed mortgage who engage in a strategic default won't be eligible for another Fannie Mae backed loan for seven years, the secondary mortgage market company says. Fannie also will seek deficiency judgements against borrowers if allowed by state law. Fannie in late July was writing full blown instructions to servicers detailing its new policies. Strategic defaults are defaults by borrowers who have the capacity to pay but don't, or who don't complete a workout alternative in good faith. Such defaults have been growing among underwater borrowers."
I can safely say that Freddie Mac will follow suit. They always go hand in hand on all rulings so they are probably working on their instructions as well. Most people think that they can get a mortgage 3 years after a foreclosure. Now they will have to prove they were not a strategic defaulter. So make sure you document your mortgage default and never lose those papers. This would be thins like unemployment insurance letters stating you are on unemployment or anything else that would prove your financial inability to pay your mortgage payment.
A lot of states don't allow for deficiency judgements on first mortgages, but most do allow them on any non-purchase 2nd mortgage. So you are at risk if your 2nd was taken out after you moved into the house.
I'll let you know as soon as I see the new rules and how they are going to be determining this. But the lawsuits for the deficiency judgements have already started in some parts of the country.
Great info debt to be free!!! Thanks for the post. Waiting for a
Great info debt to be free!!! Thanks for the post. Waiting for any updates on this.
