[Scarlett]

Apparently Fannie and Freddie are fully aware of this smart move and so they are planning to do something about it… see the article I posted above…

[Scarlett]

From SDL – From today’s LA Times:

Fannie Mae gets tough on homeowners who walk away

The mortgage giant plans to go to court against those who can afford to make their payments but decide it’s not worth it. It also will limit their access to future loans.

Taking aim at homeowners who are able to pay their mortgage but decide it’s not worth it, Fannie Mae plans to go after them in court and to limit their access to home loans for seven years.

The government-controlled mortgage giant said Wednesday that it would instruct the companies servicing its loans to recommend when it should pursue a so-called deficiency judgment — a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold.

Lenders rarely employ court proceedings to pursue foreclosures in California, nearly always opting instead for a streamlined procedure involving a trustee’s sale of the home. Under state law, however, lenders who opt for court proceedings can obtain a deficiency judgment if the mortgage was used to refinance a home, but not if it was used to finance a purchase.

“It’s not a hollow threat,” said Alex Creel, chief Sacramento lobbyist for the California Assn. of Realtors, which has called for legislation that would ban deficiency judgments in many cases of refinanced mortgages.

Fannie Mae also said it would make new mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years.

Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed.

The ban on getting a new Fannie loan is significant because home buyers have little choice these days for financing except for mortgages bought or backed by Fannie, its sister company Freddie Mac or the Federal Housing Administration. The three government-run entities financed 95% of new U.S. home loans last year.

Freddie Mac, which already blacklists strategic defaulters for five years, said it would study Fannie’s changes and “consider additional changes to our polices as needed to responsibly manage risks.”

Borrowers who default on FHA loans for any reason currently can’t get another loan insured by the agency for three years. Legislation pending in Congress would impose a lifetime ban on FHA loans to borrowers determined to have made a strategic default.

Fannie Mae’s get-tough policy on so-called walkaways is the latest fallout from the housing meltdown, which has eroded the once widely held belief in homeownership as the path to household wealth.

Foreclosures continue at a rate of 2.5 million a year, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said, and some 11 million households owe more on their mortgage than their home is worth.

Fannie Mae’s new policies are designed to prod borrowers into pursuing alternatives to foreclosure, including short sales — transactions in which lenders allow a home to be sold and cancel the debt while accepting less than full payoff of the mortgage.

Borrowers who are slightly underwater — owing just a little more than their homes are worth — are unlikely to stop paying their mortgages if they have the resources, according to studies by research firm CoreLogic. But if the home’s value is at least 25% less than the loan amount, borrowers are far more likely then to walk away.

In the fourth quarter of 2008, strategic defaulters accounted for 18% of all borrowers who were 60 days past due on their loans, according a study by credit-data giant Experian and consulting firm Oliver Wyman.

Last March, 31% of foreclosures were described as strategic by the borrowers themselves, compared with 22% in March 2009, researchers at the University of Chicago and Northwestern University reported.

[Scarlett]

From SDL – From today’s LA Times:

Fannie Mae gets tough on homeowners who walk away

The mortgage giant plans to go to court against those who can afford to make their payments but decide it’s not worth it. It also will limit their access to future loans.

Taking aim at homeowners who are able to pay their mortgage but decide it’s not worth it, Fannie Mae plans to go after them in court and to limit their access to home loans for seven years.

The government-controlled mortgage giant said Wednesday that it would instruct the companies servicing its loans to recommend when it should pursue a so-called deficiency judgment — a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold.

Lenders rarely employ court proceedings to pursue foreclosures in California, nearly always opting instead for a streamlined procedure involving a trustee’s sale of the home. Under state law, however, lenders who opt for court proceedings can obtain a deficiency judgment if the mortgage was used to refinance a home, but not if it was used to finance a purchase.

“It’s not a hollow threat,” said Alex Creel, chief Sacramento lobbyist for the California Assn. of Realtors, which has called for legislation that would ban deficiency judgments in many cases of refinanced mortgages.

Fannie Mae also said it would make new mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years.

Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed.

The ban on getting a new Fannie loan is significant because home buyers have little choice these days for financing except for mortgages bought or backed by Fannie, its sister company Freddie Mac or the Federal Housing Administration. The three government-run entities financed 95% of new U.S. home loans last year.

Freddie Mac, which already blacklists strategic defaulters for five years, said it would study Fannie’s changes and “consider additional changes to our polices as needed to responsibly manage risks.”

Borrowers who default on FHA loans for any reason currently can’t get another loan insured by the agency for three years. Legislation pending in Congress would impose a lifetime ban on FHA loans to borrowers determined to have made a strategic default.

Fannie Mae’s get-tough policy on so-called walkaways is the latest fallout from the housing meltdown, which has eroded the once widely held belief in homeownership as the path to household wealth.

Foreclosures continue at a rate of 2.5 million a year, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said, and some 11 million households owe more on their mortgage than their home is worth.

Fannie Mae’s new policies are designed to prod borrowers into pursuing alternatives to foreclosure, including short sales — transactions in which lenders allow a home to be sold and cancel the debt while accepting less than full payoff of the mortgage.

Borrowers who are slightly underwater — owing just a little more than their homes are worth — are unlikely to stop paying their mortgages if they have the resources, according to studies by research firm CoreLogic. But if the home’s value is at least 25% less than the loan amount, borrowers are far more likely then to walk away.

In the fourth quarter of 2008, strategic defaulters accounted for 18% of all borrowers who were 60 days past due on their loans, according a study by credit-data giant Experian and consulting firm Oliver Wyman.

Last March, 31% of foreclosures were described as strategic by the borrowers themselves, compared with 22% in March 2009, researchers at the University of Chicago and Northwestern University reported.

[Scarlett]

From SDL – From today’s LA Times:

Fannie Mae gets tough on homeowners who walk away

The mortgage giant plans to go to court against those who can afford to make their payments but decide it’s not worth it. It also will limit their access to future loans.

Taking aim at homeowners who are able to pay their mortgage but decide it’s not worth it, Fannie Mae plans to go after them in court and to limit their access to home loans for seven years.

The government-controlled mortgage giant said Wednesday that it would instruct the companies servicing its loans to recommend when it should pursue a so-called deficiency judgment — a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold.

Lenders rarely employ court proceedings to pursue foreclosures in California, nearly always opting instead for a streamlined procedure involving a trustee’s sale of the home. Under state law, however, lenders who opt for court proceedings can obtain a deficiency judgment if the mortgage was used to refinance a home, but not if it was used to finance a purchase.

“It’s not a hollow threat,” said Alex Creel, chief Sacramento lobbyist for the California Assn. of Realtors, which has called for legislation that would ban deficiency judgments in many cases of refinanced mortgages.

Fannie Mae also said it would make new mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years.

Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed.

The ban on getting a new Fannie loan is significant because home buyers have little choice these days for financing except for mortgages bought or backed by Fannie, its sister company Freddie Mac or the Federal Housing Administration. The three government-run entities financed 95% of new U.S. home loans last year.

Freddie Mac, which already blacklists strategic defaulters for five years, said it would study Fannie’s changes and “consider additional changes to our polices as needed to responsibly manage risks.”

Borrowers who default on FHA loans for any reason currently can’t get another loan insured by the agency for three years. Legislation pending in Congress would impose a lifetime ban on FHA loans to borrowers determined to have made a strategic default.

Fannie Mae’s get-tough policy on so-called walkaways is the latest fallout from the housing meltdown, which has eroded the once widely held belief in homeownership as the path to household wealth.

Foreclosures continue at a rate of 2.5 million a year, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said, and some 11 million households owe more on their mortgage than their home is worth.

Fannie Mae’s new policies are designed to prod borrowers into pursuing alternatives to foreclosure, including short sales — transactions in which lenders allow a home to be sold and cancel the debt while accepting less than full payoff of the mortgage.

Borrowers who are slightly underwater — owing just a little more than their homes are worth — are unlikely to stop paying their mortgages if they have the resources, according to studies by research firm CoreLogic. But if the home’s value is at least 25% less than the loan amount, borrowers are far more likely then to walk away.

In the fourth quarter of 2008, strategic defaulters accounted for 18% of all borrowers who were 60 days past due on their loans, according a study by credit-data giant Experian and consulting firm Oliver Wyman.

Last March, 31% of foreclosures were described as strategic by the borrowers themselves, compared with 22% in March 2009, researchers at the University of Chicago and Northwestern University reported.

[Scarlett]

From SDL – From today’s LA Times:

Fannie Mae gets tough on homeowners who walk away

The mortgage giant plans to go to court against those who can afford to make their payments but decide it’s not worth it. It also will limit their access to future loans.

Taking aim at homeowners who are able to pay their mortgage but decide it’s not worth it, Fannie Mae plans to go after them in court and to limit their access to home loans for seven years.

The government-controlled mortgage giant said Wednesday that it would instruct the companies servicing its loans to recommend when it should pursue a so-called deficiency judgment — a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold.

Lenders rarely employ court proceedings to pursue foreclosures in California, nearly always opting instead for a streamlined procedure involving a trustee’s sale of the home. Under state law, however, lenders who opt for court proceedings can obtain a deficiency judgment if the mortgage was used to refinance a home, but not if it was used to finance a purchase.

“It’s not a hollow threat,” said Alex Creel, chief Sacramento lobbyist for the California Assn. of Realtors, which has called for legislation that would ban deficiency judgments in many cases of refinanced mortgages.

Fannie Mae also said it would make new mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years.

Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed.

The ban on getting a new Fannie loan is significant because home buyers have little choice these days for financing except for mortgages bought or backed by Fannie, its sister company Freddie Mac or the Federal Housing Administration. The three government-run entities financed 95% of new U.S. home loans last year.

Freddie Mac, which already blacklists strategic defaulters for five years, said it would study Fannie’s changes and “consider additional changes to our polices as needed to responsibly manage risks.”

Borrowers who default on FHA loans for any reason currently can’t get another loan insured by the agency for three years. Legislation pending in Congress would impose a lifetime ban on FHA loans to borrowers determined to have made a strategic default.

Fannie Mae’s get-tough policy on so-called walkaways is the latest fallout from the housing meltdown, which has eroded the once widely held belief in homeownership as the path to household wealth.

Foreclosures continue at a rate of 2.5 million a year, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said, and some 11 million households owe more on their mortgage than their home is worth.

Fannie Mae’s new policies are designed to prod borrowers into pursuing alternatives to foreclosure, including short sales — transactions in which lenders allow a home to be sold and cancel the debt while accepting less than full payoff of the mortgage.

Borrowers who are slightly underwater — owing just a little more than their homes are worth — are unlikely to stop paying their mortgages if they have the resources, according to studies by research firm CoreLogic. But if the home’s value is at least 25% less than the loan amount, borrowers are far more likely then to walk away.

In the fourth quarter of 2008, strategic defaulters accounted for 18% of all borrowers who were 60 days past due on their loans, according a study by credit-data giant Experian and consulting firm Oliver Wyman.

Last March, 31% of foreclosures were described as strategic by the borrowers themselves, compared with 22% in March 2009, researchers at the University of Chicago and Northwestern University reported.

[Scarlett]

From SDL – From today’s LA Times:

Fannie Mae gets tough on homeowners who walk away

The mortgage giant plans to go to court against those who can afford to make their payments but decide it’s not worth it. It also will limit their access to future loans.

Taking aim at homeowners who are able to pay their mortgage but decide it’s not worth it, Fannie Mae plans to go after them in court and to limit their access to home loans for seven years.

The government-controlled mortgage giant said Wednesday that it would instruct the companies servicing its loans to recommend when it should pursue a so-called deficiency judgment — a court order requiring a defaulting borrower to pay any remaining unpaid portion of the loan after a seized home is sold.

Lenders rarely employ court proceedings to pursue foreclosures in California, nearly always opting instead for a streamlined procedure involving a trustee’s sale of the home. Under state law, however, lenders who opt for court proceedings can obtain a deficiency judgment if the mortgage was used to refinance a home, but not if it was used to finance a purchase.

“It’s not a hollow threat,” said Alex Creel, chief Sacramento lobbyist for the California Assn. of Realtors, which has called for legislation that would ban deficiency judgments in many cases of refinanced mortgages.

Fannie Mae also said it would make new mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years.

Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed.

The ban on getting a new Fannie loan is significant because home buyers have little choice these days for financing except for mortgages bought or backed by Fannie, its sister company Freddie Mac or the Federal Housing Administration. The three government-run entities financed 95% of new U.S. home loans last year.

Freddie Mac, which already blacklists strategic defaulters for five years, said it would study Fannie’s changes and “consider additional changes to our polices as needed to responsibly manage risks.”

Borrowers who default on FHA loans for any reason currently can’t get another loan insured by the agency for three years. Legislation pending in Congress would impose a lifetime ban on FHA loans to borrowers determined to have made a strategic default.

Fannie Mae’s get-tough policy on so-called walkaways is the latest fallout from the housing meltdown, which has eroded the once widely held belief in homeownership as the path to household wealth.

Foreclosures continue at a rate of 2.5 million a year, Federal Deposit Insurance Corp. Chairwoman Sheila Bair said, and some 11 million households owe more on their mortgage than their home is worth.

Fannie Mae’s new policies are designed to prod borrowers into pursuing alternatives to foreclosure, including short sales — transactions in which lenders allow a home to be sold and cancel the debt while accepting less than full payoff of the mortgage.

Borrowers who are slightly underwater — owing just a little more than their homes are worth — are unlikely to stop paying their mortgages if they have the resources, according to studies by research firm CoreLogic. But if the home’s value is at least 25% less than the loan amount, borrowers are far more likely then to walk away.

In the fourth quarter of 2008, strategic defaulters accounted for 18% of all borrowers who were 60 days past due on their loans, according a study by credit-data giant Experian and consulting firm Oliver Wyman.

Last March, 31% of foreclosures were described as strategic by the borrowers themselves, compared with 22% in March 2009, researchers at the University of Chicago and Northwestern University reported.

[Scarlett]

[quote=flu][quote=Scarlett]That’s why you take the loan without your spouse and leave her/his credit intact….[/quote]

ding ding ding…

Thank you for supporting my point about how nice stockstrader’ spouse is….

You get the “mean spouse award” for today 🙂

I’m just kidding….:)[/quote]

Stocktrader’s spouse is not just nice, she is smart. Oh, and BTW, when I thought about the same idea awhile back, I took that into account from the get-go. I.e., only one spouse on the loan (hopefully would have been enough). Who was going to be the sacrifical lamb, that was TBD…Probably me, as I have a bit higher income and higher score…I proposed the stupid idea, I volunteered… how do you like that?

[Scarlett]

[quote=flu][quote=Scarlett]That’s why you take the loan without your spouse and leave her/his credit intact….[/quote]

ding ding ding…

Thank you for supporting my point about how nice stockstrader’ spouse is….

You get the “mean spouse award” for today 🙂

I’m just kidding….:)[/quote]

Stocktrader’s spouse is not just nice, she is smart. Oh, and BTW, when I thought about the same idea awhile back, I took that into account from the get-go. I.e., only one spouse on the loan (hopefully would have been enough). Who was going to be the sacrifical lamb, that was TBD…Probably me, as I have a bit higher income and higher score…I proposed the stupid idea, I volunteered… how do you like that?

[Scarlett]

[quote=flu][quote=Scarlett]That’s why you take the loan without your spouse and leave her/his credit intact….[/quote]

ding ding ding…

Thank you for supporting my point about how nice stockstrader’ spouse is….

You get the “mean spouse award” for today 🙂

I’m just kidding….:)[/quote]

Stocktrader’s spouse is not just nice, she is smart. Oh, and BTW, when I thought about the same idea awhile back, I took that into account from the get-go. I.e., only one spouse on the loan (hopefully would have been enough). Who was going to be the sacrifical lamb, that was TBD…Probably me, as I have a bit higher income and higher score…I proposed the stupid idea, I volunteered… how do you like that?

[Scarlett]

[quote=flu][quote=Scarlett]That’s why you take the loan without your spouse and leave her/his credit intact….[/quote]

ding ding ding…

Thank you for supporting my point about how nice stockstrader’ spouse is….

You get the “mean spouse award” for today 🙂

I’m just kidding….:)[/quote]

Stocktrader’s spouse is not just nice, she is smart. Oh, and BTW, when I thought about the same idea awhile back, I took that into account from the get-go. I.e., only one spouse on the loan (hopefully would have been enough). Who was going to be the sacrifical lamb, that was TBD…Probably me, as I have a bit higher income and higher score…I proposed the stupid idea, I volunteered… how do you like that?

[Scarlett]

[quote=flu][quote=Scarlett]That’s why you take the loan without your spouse and leave her/his credit intact….[/quote]

ding ding ding…

Thank you for supporting my point about how nice stockstrader’ spouse is….

You get the “mean spouse award” for today 🙂

I’m just kidding….:)[/quote]

Stocktrader’s spouse is not just nice, she is smart. Oh, and BTW, when I thought about the same idea awhile back, I took that into account from the get-go. I.e., only one spouse on the loan (hopefully would have been enough). Who was going to be the sacrifical lamb, that was TBD…Probably me, as I have a bit higher income and higher score…I proposed the stupid idea, I volunteered… how do you like that?

[Scarlett]

That’s why you take the loan without your spouse and leave her/his credit intact….

[Scarlett]

That’s why you take the loan without your spouse and leave her/his credit intact….

[Scarlett]

That’s why you take the loan without your spouse and leave her/his credit intact….

[Scarlett]

That’s why you take the loan without your spouse and leave her/his credit intact….

[Author]

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