From Fannie Mae today:
Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure. Borrowers who have extenuating circumstances may be eligible for new loan in a shorter timeframe.
Fannie Mae will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.
Seven years is up from the typical five Fannie Mae requires in cases of foreclosure, borrowers with “extenuating circumstances” could see that five reduced to as little as two.
∙ Fannie Mae Increases Penalties for Borrowers Who Walk Away [fanniemae.com]
∙ The Rapid Rise Of “Strategic” Defaults [SocketSite]