shanNdjones June 23rd, 2010

This week Fannie Mae announced a new policy that will cause “underwater” borrowers to think again before “walking away” from their mortgages.  Borrowers who do not attempt to remediate their default, or who can show no legitimate reason for default (loss of job, unforeseen medical problems, etc.) will be subject to deficiency judgment for the unpaid balance on the mortgage, not to mention having the foreclosure appear on their credit history for seven years.  Oh, and there are tax implications, too.

We’ve talked about the morals and ethics about strategic defaults here before, and we’re not the only ones who have thoughts about whether walking away is the right decision.

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