New legislation coming from Capitol Hill will allow Fannie Mae to take legal action against mortgage owners who did not make their house payments although they were fully capable of making them.
Statistics show that approximately 2.5 million foreclosures occur each year. And at this moment, about 11 million households owe more on their home loan than what their house is worth.
The real problem lies in the fact that these consumers are committing what is now called a strategic default. They feel that they are totally blameless even to the point of not having to workout some type of payment plan. Fannie Mae feels differently and will not allow these ones access to government funds for seven years.
There will be lawsuits filed against homeowners who have in essence committed lending fraud due to refusal of payments by many of these disgruntled lenders. Any court order or winning lawsuit will force the buyer to pay any unpaid amounts or balances that are left after the house is sold.
In the state of California, a bank or mortgage lender can only obtain a court ordered deficiency judgment if the home loan was used to refinance a home but not if it was used to fund a purchase.
But what about the possibility of these homeowners who knowingly defaulted on their mortgage loan not being able to attain government sponsored loans in the future?
Sit back and think about the mortgage atmosphere when and if Fannie Mae rigidly upholds this new policy and said no to every homeowner who needed a FHA loan but could not get it due to refusing to pay their mortgage obligations.
Of course this would be the end result once it was proved that the homeowner refused to pay their home loan all because they were upside down on the value and that it wasn’t due to being unemployed.
How long will this borrower be in financial limbo? Well, according to Fannie, they would not buy or guarantee another home loan for these fraudsters for seven years.
The decision on whether a homeowner will continue to pay on a house where its value is now below what the loan amount is depends on how much the house is upside down according to data from CoreLogic.
But borrowers on both a local and national level are more likely to walk away from their St Louis home mortgage loan when the home’s value is at least 25 percent less than the original home loan amount.
Just a few months ago in March, about 31 percent of foreclosures were described as strategic walkaways by the borrowers themselves which was compared to only 22 percent in March of 2009.
As angry as this makes some people, there is a large group that is clapping at Fannie Mae’s stance on these irresponsible debtors.
The period or time frame that one should be blacklisted for is being debated by consumers all over the nation. Some feel that seven years is no where near the allotted time for punishment and others feel it is just too much.
The problem seems to have gotten totally out of hand when the fundamental idea of buying a home to live in now became simply, an investment.
The outcry has become louder against these greedy home buyers with the general consensus that they should get whatever punishment the Fannie Mae and the courts feel is fair and equitable. Maybe these ones will treat their new houses in the future as a home and not an investment.
But the losses may continue to mount for these homeowners. Fannie Mae plans on taking additional legal action by seeking deficiency judgments from these ones who walked away from their home loan payments.
But one has to ask: “If the mortgage walk-away issue is big enough for Fannie Mae to get this tough, then why is the Administration still trying to convince the American people that it’s just not that big of a deal when in reality it is of panoramic proportions?” Only time will tell.
Visit this website to learn more about St Louis mortgage refinancing loans. Stop by Floyd J. Tapia’s site where you can find out all about St Louis finance and what it can do for you. We invite you to call us at 877-334-0210 or 314-334-0210.
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