by Floyd J. Tapia
Fannie Mae may be given legal rights to sue to the fullest extent of the law those who have blatantly refused to pay their home loans when in actuality they had the money to do so.
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.
But that's not all. Mortgage lenders who feel they have been defrauded by these consumers will seek deficiency judgments in court. This will legally bind the borrower who has quit paying on their home loan to pay any balance that is still owed after their house is sold off.
But as expected, there will be limitations as in California. A lender will only get a court order for a deficiency judgment on a home used for refinancing but not as a purchase loan.
And what will ultimately happen to these borrowers who refused to pay their home mortgage loan? Will they be blacklisted from all FHA and government sponsored home loans?
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.
Especially if it can be proved that they engaged in a "strategic default" or the abandonment of their home to foreclosure not because the payments were unaffordable but because the home buyer became upside down on their St Louis loan. In other words, the mortgage loan is larger than the value of the residence.
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.
Further data from the research firm CoreLogic shows that consumers who are slightly underwater or owe a little more than their homes are worth will most likely continue to pay their mortgages if they have the resources.
However, if the home value falls more than 25 percent under the current home loan amount, more and more consumers would then simply walk away or commit a strategic default on their St Louis home mortgage loan. And these numbers seem to be nationwide.
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.
However, many are now questioning why it took so long for Fannie Mae to make these debtors finally owe up to their financial responsibilities?
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.
Over the last two to three years, there appeared to be a conscious trend for individuals to stop feeling that this house was no longer their family dwelling from the outside world but now their investment or cash cow.
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.
Many are now considering why the current Administration seems to be sweeping this issue under the political carpet as if this is not a serious problem when in reality it is of huge importance especially since Fannie Mae has taken such a strong stand against these homeowners. - 41115
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New Unique Article!
Title: St Louis Mortgage Lenders Say Industry Will Be Tough On Those Who Walk Away
Author: Floyd J. Tapia
Email: info@stlouisrefinancinggroup.com
Keywords: st louis finance,st louis mortgage lenders,st louis mortgage refinancing loan,st louis mortgage,st louis home mortgage,st louis home loan,finance,mortgage,business,real estate,loans,lending,foreclosure,credit
Word Count: 699
Category: Finance:Credit
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