Fannie Mae is getting tough on borrowers who default on their mortgages and walk away from the house even though they have the financial capacity to make the payments. The government-sponsored enterprise said it will take legal action against borrowers who opt for a "strategic" default and seek to recoup the remaining mortgage debt in jurisdictions that allow deficiency judgments. In addition, such borrowers will not be eligible for a Fannie Mae-backed loan for seven years under the new policy. "Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting," said Terence Edwards, executive vice president for credit portfolio management.
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