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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.Fannie Mae Fights Back Against Strategic Defaulters
From the Fannie Mae Release...
Fannie Mae announced today policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure.
Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure.
"We're taking these steps to highlight the importance of working with
your servicer," said Terence Edwards, executive vice president for
credit portfolio management. "Walking away from a mortgage is bad for
borrowers and bad for communities and our approach is meant to deter the
disturbing trend toward strategic defaulting. On the flip side,
borrowers facing hardship who make a good faith effort to resolve their
situation with their servicer will preserve the option to be considered
for a future Fannie Mae loan in a shorter period of time."
Fannie
Mae will also take legal action to recoup the outstanding mortgage debt
from borrowers who strategically default on their loans in
jurisdictions that allow for deficiency judgments. In an
announcement next month, the company will be instructing its servicers
to monitor delinquent loans facing foreclosure and put forth
recommendations for cases that warrant the pursuit of deficiency
judgments.
Troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, such as a loan modification, a short sale, or a deed-in-lieu of foreclosure. A borrower with extenuating circumstances who works out one of these options with their servicer could be eligible for a new mortgage loan in three years and in as little as two years depending on the circumstances
Here is the verbiage from the FN Bulletin:
Currently, the waiting period that must elapse after a borrower experiences a foreclosure is seven years. However, Fannie Mae allows a shorter time period – five years – if certain additional requirements are met (e.g., minimum down payment and credit score, and occupancy requirements).
These requirements are being modified to remove the five year option. Unless the foreclosure was the result of documented extenuating circumstances, which only requires a three-year waiting period (with additional requirements), all borrowers will now be required to meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae"
Don't miss the section that says borrowers who have extenuating circumstances may be eligible for new
loan in a shorter timeframe.
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YOUR MESSAGE HERE
Fannie Mae Fights Back Against Strategic Defaulters
From the Fannie Mae Release...
Fannie Mae announced today policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure.
Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure.
"We're taking these steps to highlight the importance of working with
your servicer," said Terence Edwards, executive vice president for
credit portfolio management. "Walking away from a mortgage is bad for
borrowers and bad for communities and our approach is meant to deter the
disturbing trend toward strategic defaulting. On the flip side,
borrowers facing hardship who make a good faith effort to resolve their
situation with their servicer will preserve the option to be considered
for a future Fannie Mae loan in a shorter period of time."
Fannie
Mae will also take legal action to recoup the outstanding mortgage debt
from borrowers who strategically default on their loans in
jurisdictions that allow for deficiency judgments. In an
announcement next month, the company will be instructing its servicers
to monitor delinquent loans facing foreclosure and put forth
recommendations for cases that warrant the pursuit of deficiency
judgments.
Troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, such as a loan modification, a short sale, or a deed-in-lieu of foreclosure. A borrower with extenuating circumstances who works out one of these options with their servicer could be eligible for a new mortgage loan in three years and in as little as two years depending on the circumstances
Here is the verbiage from the FN Bulletin:
Currently, the waiting period that must elapse after a borrower experiences a foreclosure is seven years. However, Fannie Mae allows a shorter time period – five years – if certain additional requirements are met (e.g., minimum down payment and credit score, and occupancy requirements).
These requirements are being modified to remove the five year option. Unless the foreclosure was the result of documented extenuating circumstances, which only requires a three-year waiting period (with additional requirements), all borrowers will now be required to meet a seven-year waiting period after a prior foreclosure to be eligible for a new mortgage loan eligible for sale to Fannie Mae"
Don't miss the section that says borrowers who have extenuating circumstances may be eligible for new
loan in a shorter timeframe.
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