The Federal Housing Finance Agency’s inspector general is urging the government-sponsored enterprises to pursue strategic defaulters — those who walk away from their mortgage even though they have the means to pay it. The FHFA argues in a new report that going after strategic defaulters could be a way for Fannie Mae and Freddie Mac to recover some of their losses.
For example, the report highlights that out of 35,321 deficiencies that fall into this category, the GSEs could stand to collect $2.1 billion from those who walked away from their mortgage. In 2011, the recovery rate for the GSEs was about $4.7 million, or 0.22 percent.
Deficiency management for the GSEs is not overseen by FHFA.
"With 1.1 million seriously delinquent mortgages looming on the foreclosure horizon FHFA's timely guidance on deficiency management process may help the Enterprises recoup future losses and protect taxpayers' investment in their financial health," according to the FHFA report.
Source: “FHFA Should Help Pursue Fannie, Freddie Strategic Defaulters,” HousingWire (Oct. 17, 2012)
For example, the report highlights that out of 35,321 deficiencies that fall into this category, the GSEs could stand to collect $2.1 billion from those who walked away from their mortgage. In 2011, the recovery rate for the GSEs was about $4.7 million, or 0.22 percent.
Deficiency management for the GSEs is not overseen by FHFA.
"With 1.1 million seriously delinquent mortgages looming on the foreclosure horizon FHFA's timely guidance on deficiency management process may help the Enterprises recoup future losses and protect taxpayers' investment in their financial health," according to the FHFA report.
Source: “FHFA Should Help Pursue Fannie, Freddie Strategic Defaulters,” HousingWire (Oct. 17, 2012)
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