State Farm drops lawsuit against Fannie Mae over squatter fire in PA

Published on 3/9/2023
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Lawsuit
Source: Insurance Business America

State Farm Fire & Casualty Co. has dropped its fire coverage lawsuit against Fannie Mae filed in Pennsylvania federal court, where it sought to recover payments made to a homeowner after squatters started a fire in another nearby property.

In the January lawsuit, State Farm claimed that Fannie Mae neglected a property it owned in Allentown, Pennsylvania to the point that it had become “haven” for squatters.

The occupants in Fannie Mae’s property later started a fire in November 2021, causing damage to the home of a woman living two doors down.State Farm paid out more than $75,000 for the homeowner's claim as a result of the fire, and it sought to recover these funds through the lawsuit.

Filing a motion to dismiss the following month, Fannie Mae said it had been trying to eject the squatters from its foreclosure property since November 2019. However, this eviction process had been extended after then-governor Tom Wolf ordered an eviction moratorium in response to the COVID-19 pandemic in March 2020.