Fannie Mae is being questioned by analysts.

The threat posed by Fannie Mae regarding penalizing those who walk away from their mortgages might not be enforceable according to analysts. The mega mortgage firm announced recently that it would take legal action against those who can afford to pay mortgage dues but because of the value of the property being now less than the loan due amount, choose to intentionally walk away. This is known as strategic default. These defaulters would be barred from availing of further house loans for the next seven years; this would lead to shutting out from the market potential buyers – something not wanted right now.

The experts did not know why Fannie was taking recourse to this action and what it would gain from it. The new move is contradictory to the efforts being made by the Obama government to bring back life to the housing sector.
Further fundamental questions were raised as to how Fannie would demarcate between those who could pay and those who genuinely could not pay the loan commitments. Grant Stern of Morningside Mortgage Corporation, Florida said, “How are they going to do this, and for what result? So they can find the people who have a little money left after their house crashed and take it away from them?”

A spokesperson of Fannie Mae Janis Smith said that the aim of the new penalizing plans was to make it mandatory for the house owners to cooperate with their servicers regarding surrender of their properties through either a short sale or by formal surrender of the title deed. She said, “We really want to encourage borrowers to pursue alternatives to foreclosure.”
This new aggressive stand taken by Fannie is against the background of discussions getting hot about how much liable should the borrowers be (if any at all) for the foreclosures on their houses.

The Republicans tagged on another measure to the financing bill (Federal Housing Administration) that would ban strategic defaulter from getting loans insured by FHA.
The legislature in California is mulling over a suggested law that move in the opposite direction in trying to protect the delinquent from the hands of debt collectors who chase them even after foreclosure.

Fannie Mae and Freddie Mac together hold 30 million mortgages and thus the two are important to the liquidity of the housing sector of the market They have been taken over by the government since 2008 September with costs that will gnaw into the taxpayer’s kitty by $400 billion.

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