Don’t know what a “Strategic Default” is?
In a nutshell, it is when someone still has the ability to pay their mortgage (No loss of job, No Financial Hardship, No Medical Hardship) but stop paying because the home is not worth what they owe on it.
The reason Fannie Mae is coming down so hard on this type of Default is because it continues the instability of the market and causes home values to decline in otherwise stable areas.
What people must remember is that just because your equity declines on real property does not mean that purchase was a bad investment. Values on Real Estate go up and down. The recent problem is that people used their homes as a Multi-Level marketing scheme….Bad decision!
If anything has been made very clear in this current financial crisis is that Real Estate is a “Long Term” investment. Read more about the changes being made.
If you would like more Real Estate information, please contact me:
Yvonne@YvonneArnold.com or (208) 610-9415
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