Mortgage Giant Fannie Mae Issues New Penalties
June 24, 2010— -- Mortgage giant Fannie Mae issued new penalties Wednesday to try and prevent homeowners from choosing foreclosure and walking away from their homes.
A policy announced Wednesday targets troubled borrowers who do not try in good faith to work out a deal but have the capacity to pay.
It's a warning shot to homeowners in trouble: Walk away from your home without trying every last option and you won't get another mortgage for at least seven years.
Furthermore, Fannie Mae said that in states where it can, it will sue homeowners to recoup what's not been paid.
"We're taking these steps to highlight the importance of working with your servicer," read a statement from Fannie Mae.
The homeowner is left feeling the pressure.
But on Capitol Hill today, the pressure was on the banks. Lawmakers asked what the banks had done for the homeowner.
"Why in the world aren't you giving loan modifications to more eligible borrowers," Rep. Dennis Kucinich, D-Ohio, asked in a hearing.
In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage companies, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period. The company did not detail how long the wait might be.
