Fannie To Allow Walkaways by On-Time Borrowers: Mortgages
Fannie Mae and Freddie Mac are rewarding some homeowners who have continued to pay their mortgages even though they are underwater (owing more than their property is worth). Starting in March, with certain restrictions, some home loans will be forgiven and homeowners will be allowed to relinquish their property without penalty; the program is termed deed-in-lieu transactions. Previously only financial forgiveness was given to borrowers who had already stopped paying their mortgage and gone into default. Short sales have also been an assistive aid for people trying to get out of the mortgage when the property values plummeted. The intention of the deed-in-lieu transaction program is to help on many levels, from the borrower who needs to move, to the reduction of abandoned homes to the strengthening of the housing market. More...