Mortgage Release: Three Exit Options
Homeowners with Fannie Mae loans who struggle to pay their mortgage and want to avoid foreclosure (and other legal actions like a deficiency judgment) may qualify for a new program called Mortgage Release.
Mortgage Release allows delinquent homeowners to voluntarily transfer their home (the title and all property associated with it) to their mortgage company in exchange for being “released” from their monthly mortgage payments. Mortgage Release may even provide a cash incentive of up to $3,000 to eligible homeowners to help with moving expenses.
The program features three exit options:
- Leave the home immediately
- Stay in the home for up to three months (without paying rent)
- Stay in the home for up 12 months (paying market-rate rent)
Why It Matters
Mortgage Release meets the needs of people who may need more time to plan their move, especially if they are transitioning jobs or have children in school. “This is a simple and flexible alternative to foreclosure that puts homeowners in control of when they leave their home,” explains Bill Cleary, Fannie Mae’s vice president of Credit Portfolio Strategies. “Homeowners can vacate the home immediately, stay up to three months to plan their transition, or pay market-based rent and stay for up to a year. Having options with their exit choices can make their transition much easier all-around,” says Cleary.
In addition gaining control, homeowners who qualify for a Mortgage Release can become eligible for a Fannie Mae loan in as little as 2 years versus having to wait up to 7 years if they’d gone through foreclosure. Additionally, legal actions (like a deficiency judgment) are waived.
“This means you can start repairing your credit much sooner,” notes Cleary.
Finally, because Mortgage Release is not a foreclosure, the homeowner’s name doesn’t appear in the newspaper (such as happens during a foreclosure), providing more privacy.
Get Help Now
If you’re behind in your mortgage payments and your loan is owned by Fannie Mae, ask your mortgage company (the company listed on your monthly mortgage statement) about Mortgage Release or contact a Fannie Mae Mortgage Help Center.