Fannie Mae Will Deny New Loans to Homeowners Who Walk Away

Fannie Mae, the mortgage guarantor 80 percent owned by the U.S. government, will temporarily deny new loans to borrowers who deliberately default and walk away from their homes.

Borrowers who have the means to make mortgage payments and don’t work with lenders to restructure loans will be banned from obtaining new mortgages backed by Fannie Mae for seven years from the date of foreclosure, the company said today in a statement. Washington-based Fannie Mae, along with McLean, Virginia-based rival Freddie Mac, own or guarantee more than half of the $10.7 trillion U.S. mortgage market.