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Fannie Mae Warning To Homeowners Walking Away From Mortgage Obligations
One of the largest sources of home mortgage financing, Fannie Mae has issued a warning to homeowners planning to give up on their home loan obligations by walking away.
The warning is this; borrowers who have been foreclosed on will be unable to obtain a loan for up to five years through the mortgage giant, unless there are "documented extenuating circumstances” in which those borrowers would have to wait up to 3 years for a new mortgage. After the waiting period, you must have at least a 10 percent down payment and a minimum FICO score of 680 to qualify for a new home loan.
Walking away from mortgage obligations has been a growing trend, especially in markets that experienced unprecedented equity growth during the housing boom. Now that prices have begun to deflate, many homeowners are stuck with a home loan that is greater than the value of the property they own.
A number of websites have also contributed to the growing problem by claiming to be able to help homeowners walk away from their mortgage obligations. For a small fee, a number of these websites claim that they will show you how to live in your home for up to 8 months without making payments, receive moving compensation and they will even have the foreclosure removed from your credit report.
According to myfico.com, the official website of Fair Isaac Corp, a foreclosure can drop your credit score by up to 150 points. 35 percent of your credit score is based on your payment history, which includes mortgage loan payments. Your credit score is also time based, so the longer a foreclosure has been on your record, the less impact it will have on your credit score. In other words, if you signed for a mortgage loan and it is going into foreclosure you can expect it to show up on your credit report.
It doesn’t matter what these online walk away websites promote, if you walk away from your home, your credit score will suffer and Fannie Mae will penalize you for up to 5 years.
Submitted by admin 4/13/08
One of the largest sources of home mortgage financing, Fannie Mae has issued a warning to homeowners planning to give up on their home loan obligations by walking away.
The warning is this; borrowers who have been foreclosed on will be unable to obtain a loan for up to five years through the mortgage giant, unless there are "documented extenuating circumstances” in which those borrowers would have to wait up to 3 years for a new mortgage. After the waiting period, you must have at least a 10 percent down payment and a minimum FICO score of 680 to qualify for a new home loan.
Walking away from mortgage obligations has been a growing trend, especially in markets that experienced unprecedented equity growth during the housing boom. Now that prices have begun to deflate, many homeowners are stuck with a home loan that is greater than the value of the property they own.
A number of websites have also contributed to the growing problem by claiming to be able to help homeowners walk away from their mortgage obligations. For a small fee, a number of these websites claim that they will show you how to live in your home for up to 8 months without making payments, receive moving compensation and they will even have the foreclosure removed from your credit report.
According to myfico.com, the official website of Fair Isaac Corp, a foreclosure can drop your credit score by up to 150 points. 35 percent of your credit score is based on your payment history, which includes mortgage loan payments. Your credit score is also time based, so the longer a foreclosure has been on your record, the less impact it will have on your credit score. In other words, if you signed for a mortgage loan and it is going into foreclosure you can expect it to show up on your credit report.
It doesn’t matter what these online walk away websites promote, if you walk away from your home, your credit score will suffer and Fannie Mae will penalize you for up to 5 years.
Submitted by admin 4/13/08