If you’re considering the “strategic foreclosure” option (walking away from your home and “letting it go back” to the bank), here’s another piece of the puzzle.
Fannie Mae recently announced that they are modifying the amount of time required for someone to qualify for a new mortgage after they’ve had a foreclosure.
The waiting period used to be 2 years for most loans. The new rule makes it so you won’t be able to buy another home for 7 years after a foreclosure. Now, if you can fully document “extenuating circumstances,” and meet a few additonal eligibility requirements, it may only be 3 years for you. But if you walk away, and you had the capacity to pay, chances are you will not be getting another mortgage for 7 years.
What it comes down to is this: If you’re in trouble, get help. Financial issues are embarassing and stressful, and when you’re in the middle of them, it’s almost impossible to think rationally enough to see all your options clearly. You just want to do what’s best for your family. But if you do this wrong, there could be negative consequences for years and years to come. Call me first. There are things I can help you with, and if it’s out of my range of expertise, I know which local experts to send you to.