Fannie Mae To Deny Loans to Homeowners Who Walk Away.

June 26, 2010 at 1:59 pm Leave a comment

by: Maria Hass

Bloomberg.com reported an article on June 23, 2010 which announces that Fannie Mae will temporarily deny new loans to homeowners who walk away. The recently acquired government owned mortgage giant which holds 80% of all mortgage loans stated that, new loans will not be approved for seven years to anyone who deliberately walked away without working to restructure their loans.

I am uncertain whether this denial is aimed at ALL homeowners who failed to apply for a loan modification. What about those homeowners who pursued a short sale? Some homeowners sell their home because they are relocating, the home is too far from work or financially hard up. Careful consideration as to why the homeowner did not apply for a loan modification has to be weighed and each case has to be looked at individually. While it is not right for homeowners to walk away only because the market value has gone down by 40% to 60% in Arizona, it is also inconsiderate for lenders to leave homeowners upside down without reducing their principal mortgage to what is realistic. It will take 15 to 20 years based on a national appreciation of 3%-5% for most homeowners in Arizona to get even with what they owe. If they sell before that, they will have to short sale anyway down the road because they are still upside down. This will slow down the housing recovery which is not helpful to the economy.

For a complete story, click on http://www.bloomberg.com/news/2010-06-23/fannie-mae-to-deny-new-loans-to-homeowners-who-walk-away-from-their-homes.html/

Entry filed under: Arizona Real Estate, Foreclosures & Short Sales.

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