Fannie Mae Warns of Walkaways
New guidelines were released to lenders regarding walkaways and foreclosures. If you are a homeowner and are considering walking away from your mortgage, the Fannie Mae Foundation wants you to know that doing so will make it harder for you to apply for your next loan.
Fannie will not allow foreclosed borrowers to avail new mortgage for five years except for “documented extenuating circumstances.” In such cases, the ban is for three years, the report added.
A 10 percent down payment will be required for borrowers with reported foreclosures, and they will need at least 680 FICO credit scores when they apply.
The Chronicle noted that the walkaway trend has been on the rise in former boom markets such as Florida, Nevada and California. This is because many homeowners are behind in their mortgages more than the current market value of their homes.
