The Federal Housing Finance Agency (FHFA) is pushing Fannie Mae and Freddie Mac to track down debtors even after foreclosure. Strategic defaulters may not be happy to hear this. Strategic defaulters are folks who allow their homes to go into foreclosure even though they are able to make their mortgage payments.
There are many states, including our very own Florida, where banks are legally able to pursue deficiency judgments after foreclosure. A deficiency judgment can be issued if a foreclosure auction does not bring in enough money to pay the mortgage plus incurred legal fees and penalties. But banks have not been very aggressive about doing so. Some folks counted on this to stop paying their mortgages and live “free” in the property until the sale date, when title would transfer to the bank and the homeowner would be forced to leave. They figured that was the end of that, and they could then start elsewhere on a clean slate, so to speak.
In a sense, they were right, because the banks were not availing themselves of their right to pursue a deficiency judgment. Fannie Mae and Freddie Mac are both stating they intend to be more vigilant about pursuing deficiency judgments in the future. Read more about it here.
You have options other than “just letting it go.” Contact us for a free consultation today.