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St Louis Finance Terms Will Get Harder For Home Buyers Who Walk Away From Their Mortgage

New legislation coming from Capitol Hill will allow Fannie Mae to take legal action against mortgage owners who did not make their house payments although they were fully capable of making them.

The amount of foreclosures that most likely will happen this year will be at least 2.6 million. What is worse is that approximately 11 million owners are severely underwater as far as their homes are worth according to St Louis finance news.

The term strategic default has come about as a direct result of these consumers refusing to pay their home loan mortgage and not wanting to seek alternative options due to their situation. The final surprise will be on these home buyers because Fannie Mae plans are not funding these people for at least seven years.

There will be lawsuits filed against homeowners who have in essence committed lending fraud due to refusal of payments by many of these disgruntled lenders. Any court order or winning lawsuit will force the buyer to pay any unpaid amounts or balances that are left after the house is sold.

But as expected, there will be limitations as in California. A lender will only get a court order for a deficiency judgment on a home used for refinancing but not as a purchase loan.

And what will ultimately happen to these borrowers who refused to pay their home mortgage loan? Will they be blacklisted from all FHA and government sponsored home loans?

Think about it for a moment: What if Fannie Mae took the stance that any government sponsored loans such as a FHA loan would not be available for ones who simply walked away from their home loan?

Of course this would be the end result once it was proved that the homeowner refused to pay their home loan all because they were upside down on the value and that it wasn't due to being unemployed.

So how long could one be banned from doing business with Fannie Mae? Well at this point, Fannie would no longer buy or guarantee a home loan for about seven years.

Further data from the research firm CoreLogic shows that consumers who are slightly underwater or owe a little more than their homes are worth will most likely continue to pay their mortgages if they have the resources.

However, if the home value falls more than 25 percent under the current home loan amount, more and more consumers would then simply walk away or commit a strategic default on their St Louis home mortgage loan. And these numbers seem to be nationwide.

Just a few months ago, St Louis mortgage lenders said about 31 percent of foreclosures were described as strategic walkaways by the borrowers themselves which was compared to only 22 percent in March of 2009.

There are those who openly support this long overdue decision made by Fannie Mae and those who feel this isn't fair nor legal to force on those whose homes were affected by this bad economy.

And why should this ineligibility only last seven years? Should we not throw the proverbial book at these irresponsible fools who in essence helped cause the greatest collapse in the housing industry since the Great Depression?

The real problem started when homeowners began treating their house as an investment or A.T.M. instead of their family's home.

Thus, it is probably time that these greedy homeowners who thought nothing at the moment of refinancing their homes to the hill should be held accountable and taught a valuable lesson that one's home is for living in and not for entertainment or investment purposes.

A recent press release said that "Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically defaulted on their home loans in jurisdictions that allow for deficiency judgments."

Many are now considering why the current Administration seems to be sweeping this issue under the political carpet as if this is not a serious problem when in reality it is of huge importance especially since Fannie Mae has taken such a strong stand against these homeowners.
About Author Floyd J. Tapia :

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Article Added on Tuesday, November 22, 2011
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