Fannie Set to Penalize Defaulters
Fannie Mae said Wednesday it would "lock out" borrowers from getting a new loan for seven years if they default on a mortgage they could afford to pay.
The move represents the latest effort by the mortgage industry to prevent a new wave of losses that could result if more borrowers who can afford their monthly payments instead opt to "strategically" default on loans, because they owe far more than their homes are worth.
Well, I guess there is a caveat. "if they default on a mortgage they could afford to pay". So it's a subjective course correction. If you legitimately could not afford a loan, well then, you are eligible for another one.
Fannie's move comes amid greater concern that it has become socially acceptable for borrowers to stop paying their loans, and that such a shift could exacerbate the housing bust.That's just funny. file this under "DUH!". An administration and a congress that has done nothing but inflated the entitlement culture, discouraged the idea of self reliance and personal responsibility, and can't bare the plight of failure is now wondering why it has become socially acceptable for borrowers to walk away from their obligations. Hmmmmm?
Nearly one in four homeowners with a mortgage is underwater, or owes more than their home is worth, according to CoreLogicSo if you are good at managing money and recognize what the right move is, in order to maximize cash-flow for your family, then you don't deserve a home. However, if your some dumb ass who has never been able to balance a check book? Then you deserve the American dream, and it's on us, keep the change.
When I first read the WSJ article I thought for a moment that maybe Fannie was smartening up. Nope. They are still bent on being the transfer of wealth machine that they set out to be. The amount of wealth being transferred to unproductive members of our society makes the BP spill look like a guy taking a whiz into the ocean.