Fannie Mae Takes Aim at Strategic Defaults

Borrowers with a Fannie Mae-backed mortgage who engage in a strategic default won’t be eligible for another Fannie Mae-backed loan for seven years, the secondary mortgage market company says in a notice that outlines its policy for combatting strategic defaults. Fannie will also seek deficiency judgments against the borrower, if allowed by state law. Fannie plans to issue instructions this month to servicers detailing its new policies. Strategic default are defaults by borrowers who have the capacity to pay but don’t or who don’t complete a workout alternative in good faith. For more info contact Jeff Lischer, jlischer@realtors.org, 202/383-1117. Read the notice.

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