Considering Walking Away From Your Home - Think Again!

Many homeowners are having a tough time paying their mortgages. They either cannot pay due to financial reasons or they will not pay for a property because they owe more than it is worth. If the latter applies they are increasing their risk of being penalized for doing so. Fannie Mae calls this a "strategic default".

In October 2010, any homeowner who strategically defaults on their mortgage will be disqualified for a Fannie Mae mortgage for seven years from the date of their foreclosure. This of course would include FHA loans. Fannie Mae is also considering suing to recover any outstanding mortgage debt by the homeowner.

To date, Fannie Mae backs approximately 40% of all mortgages while FHA insures around 30% of home mortgages. Freddie Mac is also exploring Fannie Mae's new policy. Currently, 25% of homeowners owe more than their homes are worth. If these 25% decided to walk away from their homes, what would happen to the already distressed housing crisis?

Homeowners who are ignoring their mortgage obligations but have access to credit lines and are paying their other debt obligations will be Fannie Mae's primary focus. This could cause a lot of controversy, as proving a homeowner is strategically defaulting could be questionable. Most lenders agree this is necessary to help control the vast amount of homeowners ignoring their financial mortgage obligations.

All agree this is becoming a very serious problem. There needs to be a uniform law to address this deliberate intent by the homeowner. The question arises whether a homeowner is defaulting intentionally or they really cannot afford their monthly payments. Is the homeowner actually guilty of strategically defaulting on their mortgage? If they are, there will be serious and measurable consequences.

Defaulting on your mortgage, which equates to foreclosure, is already damaging enough. The homeowner's credit history is seriously affected. Some agree changing the bankruptcy laws that possibly could reduce a homeowner's mortgage could be the answer.

Strategic defaulters basically have two options. The homeowner can continue to pay their mortgage payments for something they own even though they are upside down on, or possibly pay for something Fannie Mae owns. These two alternatives seem to be very obvious.

Is this new Fannie Mae policy really the answer? Before the homeowner packs their bags, do your research and consult with an attorney. No matter what lies ahead, homeowners should definitely think twice before walking away from their homes.

Exclusive representation to buyers and sellers is a complex venture. Real Estate Homes, LLC philosophy has accomplished this with great success. For more information on new rules and guidelines for distressed properties and information on Phoenix Homes for Sale or Tucson Homes for Sale, please visit Real Estate Homes, LLC where you can search for all available homes for sale.