Maryland Short Sales 301-343-7671

Last week the House of Representatives passed the FHA Reform Act designed to replenish funds for the Federal Housing Authority or FHA.  Currently many homebuyers are using FHA financing and the reserves for FHA are dwindling.

The House of Representatives, at the last minute, added an additional provision to the bill designed to penalize those homeowners who strategically default on their existing loan.  Under the provision, homeowners who strategically default on their loan WILL NOT be eligible for FHA financing in the future!  The provision does not apply to those individuals who have a valid hardship and can no longer afford their payments.

This bill has not passed through the Senate as of yet, and I would anticipate many changes to accompany the bill so stay tuned.  Strategic defaults are becoming a huge problem for lenders and the Obama Administration.  I would anticipate that both FHA and Fannie Mae/ Freddie Mac start to put in place strict policies to prevent homeowners from these Strategic Defaults.

If you would like more information on these latest developments or would like a confidential consultation about your particular situation contact me today.

A report was recently released that has alarmed many of the major lenders in our country.  The study shows that some homeowners are intentionally allowing their homes to go to foreclosure.  “Strategic Defaults” as they are being called are being used as a financial strategy to offset the decline in a homes value.  Below is an excerpt from the article.

Perhaps more surprisingly, the report finds that the people who are most likely to use a default as a financial strategy are those with good credit scores. According to the study, those in the “superprime” and “prime” categories are 50 percent more likely to go into strategic default than their counterparts with lower credit scores.

http://www.credit.com/news/housing-market/2009-09-30/people-with-good-credit-more-likely-to-strategically-default-.html#