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.
These strategic defaulters who could obviously pay their mortgage but decided it was not worth their time or money and who did not complete a workout alternative in good faith will have to face Fannie Mae who plans to limit their access to government-sponsored home loans for seven years.
In addition, many of the lenders who have been victims to this reckless behavior are seeking what legal experts call deficiency judgments. This is a court order requiring a borrower who has defaulted on their mortgage to pay any unpaid portion of the home loan after a foreclosed or seized house is sold.
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 as regards the ability for future borrowers who have purposely defaulted on their current mortgage to attain another government-sponsored home loan?
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.
And all this because the homeowner purposely walked away from their St Louis mortgage responsibility due to being underwater and not because they couldn’t pay but simply wouldn’t continue paying.
So how long could one be banned from doing business with Fannie Mae? Well at this point, Fannie would no longer buy or guarantee a home loan for about seven years.
The research firm CoreLogic interestingly points out based upon their recent data that homeowners will more often than not continue to pay on their mortgage even if their house value drops if they have the money and income to do so.
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.
However, many are now questioning why it took so long for Fannie Mae to make these debtors finally owe up to their financial responsibilities?
And then there are the hardliners who feel the punishment as it were should last longer than seven years. Why? Because they feel the mortgage collapse was a direct result of these irresponsible home buyers.
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.
As a struggling nation trying to get back its financial strength, many experts are calling for the use of common sense and thus get back to the traditional viewpoint that a house is a home to live in and not our own personal A.T.M.
Fannie Mae is apparently not letting bygones be bygones. Not only will they refuse loans to these home buyers for seven years, they are getting court orders seeking deficiency judgments making them pay any balances owed after the home is sold.
Now that Fannie Mae has taken steps to make these ones pay for their lack of responsibility and curtail future offenders, experts are saying maybe the Administration will stop making less of this problem and also take a strong position which may help prevent another mortgage fiasco from ever happening again.
Want to find out more about a St Louis finance loan, then visit Floyd J. Tapia’s site on how to choose the best St Louis mortgage lenders for all of your St Louis lending needs. Or give us a call at 877-334-0210 or 314-334-0210.
