A strategic default is when a homeowner walks away from their property, owing more than its current value. In some cases, the homeowner can afford the payments however feels this financial maneuver is in his/her best interest. Thousands of homeowners have strategically defaulted on their mortgage, leaving the mortgage company or lender stuck to deal with a non-performing asset which will furthermore affect the community around them.
Because of a new Fannie Mae regulation, strategic defaults will carry more severe consequences. Starting July, Fannie Mae no longer guarantees loans to homeowners who walk away from their mortgage for the next 7 years. They will also attempt to force homeowners to pay for losses incurred through the default, where legally possible. If a homeowner takes the proactive steps to working on a short-sale or deed in lieu with their lender, Fannie Mae is willing to guarantee the homeowners newly originated loan in as soon as 2 years. Not having the resources to secure financing and acquire property within this 5 year gap will be a crucial misfortune for many.
This should be looked at more positively for all parties involved. Remember, homes victim to strategic default tend to end up as Bank REOs and many times sold below market price. Banks don’t usually fix up homes and maximize full potential value but rather sell in As-Is condition. Dealing with the situation in all honesty is in the best interests of all parties, that would otherwise be burdened by a strategic default.
Because of a new Fannie Mae regulation, strategic defaults will carry more severe consequences. Starting July, Fannie Mae no longer guarantees loans to homeowners who walk away from their mortgage for the next 7 years. They will also attempt to force homeowners to pay for losses incurred through the default, where legally possible. If a homeowner takes the proactive steps to working on a short-sale or deed in lieu with their lender, Fannie Mae is willing to guarantee the homeowners newly originated loan in as soon as 2 years. Not having the resources to secure financing and acquire property within this 5 year gap will be a crucial misfortune for many.
This should be looked at more positively for all parties involved. Remember, homes victim to strategic default tend to end up as Bank REOs and many times sold below market price. Banks don’t usually fix up homes and maximize full potential value but rather sell in As-Is condition. Dealing with the situation in all honesty is in the best interests of all parties, that would otherwise be burdened by a strategic default.
* Our latest short-sale was approved with a buyer in escrow in less than 60 days from listing! That’s because everything is done In-House!
Call us for a NO obligation consultation,
Kind Regards,
Paul Youssef
(714) 501-6333
Realty World Orange Coast
Lic # 01726611
