Fannie Mae has publicly threatened to punish strategic defaulters by make them ineligible for a Fannie Mae backed loan for 7 years. Rumor has it that they will determine "strategic defaulters" (those that could afford to pay but chose not to) from non-strategic defaulters by pulling credit reports to see if the borrower was behind on their other obligations at or around the time of default/foreclosure.
The main foreclosure alternatives are loan modifications and short sales. We have been saying for months and months that in almost every situation, a short sale will be better for a homeowner than will a foreclosure.
A homeowner/borrower with extenuation circumstances or a documentable hardship who works out a foreclosure alternative with their lender could be eligible for a new mortgage in three years and possibly in as little as two years, depending upon the circumstances.
If you feel that you want to keep your home long term, and still have income to support a continued mortgage, tax and insurance payment, then attempting a loan modification may well be the best first choice. But if a loan modification is not approved or not what you desire, than a short sale may well be the way to go.
To see if you may qualify for the new HAFA short sale program, click the HAFA link to the right. But, by all means, explore your foreclosure alternatives and become aware of the ramifications of any avenue you decide on.
