Think Twice Before Walking Away from an "Under Water" Property.

Many homeowners are walking away from their "under water" homes these days in what is referred to as a "strategic default". In many cases where the home is worth less than the outstanding balance on the mortgage many people are opting to let the bank foreclose on the property, even if they can afford to make the payments.

Fannie Mae, on Wednesday, said that it will get tough on borrowers who have the ability to pay their mortgage but opt to walk away. For those that default on their loan by choice, Fannie Mae will refuse to guarantee another loan for seven years. In addition, they will seek to recoup losses through deficiency judgements.

If the foreclosure is as a result of true hardship, and an inability to pay, the usual rules will still apply. Defaulting borrowers who try to work with their lender can still be eligible for a new loan in two or three years if they can prove their hardship (such as job loss, divorce, illness, etc.).

Thanks for stopping by to read my comments and please visit my website at http://www.herbandeileen.com/

Make it a great day!