St Louis Mortgage Refinancing Loans May Not Be Available For Walk Aways

There will be new legal guidelines that will give Fannie Mae legal recourse against home loan buyers who refused to make their mortgage payments when financially they were able to.

The situation has imploded to the point that there may be more than 2.4 million foreclosures that will occur. And this doesn’t include the millions of homeowners who are upside down on their homes.

These strategic defaulters who could obviously pay their mortgage but decided it was not worth their time or money and who did not complete a workout alternative in good faith will have to face Fannie Mae who plans to limit their access to government-sponsored home loans for seven years.

But that’s not all. Mortgage lenders who feel they have been defrauded by these consumers will seek deficiency judgments in court. This will legally bind the borrower who has quit paying on their home loan to pay any balance that is still owed after their house is sold off.

In the state of California, a bank or mortgage lender can only obtain a court ordered deficiency judgment if the home loan was used to refinance a home but not if it was used to fund a purchase.

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?

Especially if it can be proved that they engaged in a “strategic default” or the abandonment of their home to foreclosure not because the payments were unaffordable but because the home buyer became upside down on their St Louis loan. In other words, the mortgage loan is larger than the value of the residence.

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 in March, 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 problem seems to have gotten totally out of hand when the fundamental idea of buying a home to live in now became simply, an investment.

As a struggling nation trying to get back its financial strength, many experts are calling for the use of common sense and thus get back to the traditional viewpoint that a house is a home to live in and not our own personal A.T.M.

Fannie Mae is apparently not letting bygones be bygones. Not only will they refuse loans to these home buyers for seven years, they are getting court orders seeking deficiency judgments making them pay any balances owed after the home is sold.

But one has to ask: “If the mortgage walk-away issue is big enough for Fannie Mae to get this tough, then why is the Administration still trying to convince the American people that it’s just not that big of a deal when in reality it is of panoramic proportions?” Only time will tell.

Visit this website to learn more about St Louis mortgage refinancing loans. Stop by Floyd J. Tapia’s site where you can find out all about St Louis finance and what it can do for you. We invite you to call us at 877-334-0210 or 314-334-0210.