The Federal Housing Finance Agency is seeking comment on a proposal to restrict Fannie Mae, Freddie Mac and the Federal Home Loan Banks from investing in mortgages with private transfer-fee covenants.
“The private transfer-fee covenants appear to run counter to the important mission of the housing GSEs (government-sponsored enterprises) to increase liquidity, affordability and stability,” FHFA acting director Edward DeMarco said Thursday. “Fees that may not be properly disclosed may impede the marketability and the valuation of properties and adversely affect the liquidity of securities backed by mortgages on those properties.”
Although proponents say the fees can help fund investments that benefit communities, the FHFA is concerned that the fees fund purely private streams of income for “select market participants,” the agency said in the statement announcing a 60-day comment period. Bloomberg News; Associated Press file photo
