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Tag Archives: strategic default

Fannie Mae threatens “strategic defaulters”

Posted on June 29, 2010 by Elizabeth Rosar Chermack

Fannie Mae recently announced that it plans to punish people who strategically default on their mortgages.  This announcement was met with skepticism by some housing and lending experts.

It’s difficult to blame Fannie Mae for being nervous about people walking away from their mortgages when strategic default is being regularly reported on in the news:

Owners Stop Paying Mortgages, And Stop Fretting.

American Dream 2: Default, Then Rent

I think that it will be difficult for Fannie Mae to decide whether someone strategically defaulted. Many people have applied for the HAMP program, only to end up in foreclosure. Foreclosures are, unfortunately, rising. See More rural, suburban Minnesotans threatened with foreclosure. See also Foreclosures Are Rising.

Fannie Mae’s threats might scare a few people from walking away from their underwater mortgages, but its threats alone will not be enough to fix our nation’s housing mess. Fannie Mae’s energy could be better spent on making sure servicers are following the Making Home Affordable program guidelines in a timely manner.


Posted in Housing Law | Tags: Fannie Mae, foreclosure, HAMP, Making Home Affordable, strategic default, underwater mortgage | Leave a comment |

Strategic Default

Posted on May 10, 2010 by Elizabeth Rosar Chermack

Last night, on 60 Minutes, there was a segment about people strategically defaulting on their mortgages. Watch the video to gain some insight into why people are doing it, and how they struggled with deciding whether they should do it.

Posted in Housing Law | Tags: strategic default, underwater mortgage | Leave a comment |

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