Are you thinking of a Strategic Default on your mortgage?

If so, you have lots of company. Approximately 20% of the mortgage defaults so far this year involved borrowers who could afford to pay their mortgage according to Experian, the consumer credit agency. They go on to report that it does appear that the pace of these defaults is slowing however. This is in part due to the new policy implemented by Fannie Mae concerning those who strategically default. Under the new policy you will have to wait 7 years before trying to obtain a Fannie Mae backed loan. Previously, a 5 year waiting period was in place. However for those who attempt to sell their property by trying to market it as a short sale (selling for less than the loan balance), the waiting period can be as little as 2 years. The same policy applies to a deed in lieu of foreclosure (where the homeowner transfers the deed over to the lender in exchange for the lender not pursuing the foreclosure). It should be further noted that the deed in lieu of foreclosure is usually not granted until the homeowner attempt to sell the property by short sale.

It makes sense for those heading down this path due to the decline in home values to make a good faith attempt to try to sell the property first by short sale so that the time frame to purchase again is shorter.

If you would like to discuss the above options further, you may contact me at

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