Fannie Mae Announces Seven Year Lockout For Strategic Defaulters Who Flee Mortgages

Mortgage borrowers who simply walk away from an underwater loan, or who do not pursue a good faith loan modification effort with their servicers will not be eligible for a new Fannie Mae backed loan for seven years from the date of foreclosure under a new policy directive issued by Fannie Mae June 24.

Borrowers who have extenuating circumstances “may be eligible for [a] new loan in a shorter time frame,” Fannie said in a statement announcing the new policy.

“We’re taking these steps to highlight the importance of working with your servicer,” said Terence Edwards, Fannie executive vice president ...