The Federal Housing Finance Agency has ordered Fannie Mae and Freddie Mac not to pursue any deficiency judgments against members of the military if they are forced to short sale their home and if the mortgagor is “required to move as part of their duty,” according to a statement released by the agency.
The FHFA said military homeowners who receive “Permanent Change of Station” orders and who are current (but underwater) can sell their homes without facing this additional debt burden against them.
At press time it was unclear how many military mortgagors might fall into this category. A CFPB spokeswoman did not return an inquiry about the matter.
Last year Fannie and Freddie issued guidance to mortgage servicers confirming PCS orders as a qualifying hardship for forbearance and loan modifications.
PCS orders can require quick transfers by personnel, making it difficult to sell their homes—which might be underwater without taking a large loss.
