Borrowers who walk away from mortgages they can afford to pay - making "strategic defaults" - are running increasing risks that they'll be penalized for doing so.
Starting in October, Fannie Mae says, strategic defaulters will be disqualified for new Fannie Mae-backed loans for seven years after their foreclosures. Fannie also says it will go to court where it can to recoup outstanding mortgage debt from borrowers who strategically default.
Under a bill that's passed the House and awaits Senate action, the Federal Housing Administration would be barred from insuring mortgages for those who previously ditched a mortgage they had the ability to pay.
Get-tough policies are forming at the same time that about a quarter of mortgage borrowers owe more than their homes are worth.
Fannie Mae buys about 40% of all mortgages and packages them for resale to investors. The FHA insures about 30% of home mortgages.
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Well, I suppose somebody has to be tough, why not the Feds? It really is a shame that so many folks have fallen into this situation, but strategic defaults are the same as shoplifting.