In a strategic move, some homeowners have decided to walk away from their homes even though they could still afford the payments. They simply decide that their value is too low and they either short sale or allow the bank to foreclose.
Fannie Mae, making a clear statement, announced Wednesday that they will "lock out" borrowers from getting new loans for seven years if they "strategically default" on their loan. Typically, if a person does a short sale then they can't purchase for two years. Fannie Mae is hoping this step will discourage homeowners from walking away from their home because of equity loss.
The Tampa Bay market has seen it's share of equity loss with some homes losing as much as 50%. I can understand the thinking behind why people "strategically default" but I don't think they realize how much it hurts the market. When I say it hurts the "market", I'm referring to your neighbors, family, friends and anyone else that owns a home in the area. That one person that "strategically defaults" brings down the value of all the others who choose not to default.
Please take a moment to read the Wall Street Journal article regarding Fannie Mae's "lock out" plan as well as how their trying to help the homeowners that truly can't afford their mortgages.
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