Fannie is trying to recoup the difference between what the borrowers owed on the mortgages when they were foreclosed and the amount Fannie received when it resold the properties. In Florida, these deficiency judgments can be pursued for 20 years, and borrowers must also pay a compounded annual interest rate of 4.5 percent. Several legal experts claim that Fannie Mae is not entitled to collect on those debts because the foreclosure was unlawful, due to robo-signers.
1. What does the recently filed class action suit against against Dyck-O’Neal, a debt collector for Fannie Mae, claim?
2. Approximately what percentage of borrowers don’t even show up in court for the deficiency judgments?
3. In what states is it legal for lenders to pursue deficiency judgments? Why do you think this article focused on Florida? Give several reasons.
Morgenson, G. (2014) Borrowers, Beware: The Robo-signers Aren’t Finished Yet. The New York Times, Nov.15 (Retrievable online at http://www.nytimes.com/2014/11/16/business/borrowers-beware-the-robosigners-arent-finished-yet.html?mabReward=RI%3A5&src=recg&mabReward=RI%3A5&module=Ribbon&version=origin®ion=Header&action=click&contentCollection=Recommended&pgtype=Blogs)