Industry NewsMortgage

Feds move to restrict private transfer fees

Fannie, Freddie would be barred from investing in encumbered loans
Published on Aug 13, 2010

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by CareyBot

Federal regulators are moving to ban Fannie Mae, Freddie Mac and the Federal Home Loan Banks from investing in loans with private transfer-fee covenants, a controversial technique for financing the capital costs of new housing developments.

A coalition of real estate industry groups and consumer advocates is campaigning for a federal ban, saying the fees -- which are collected each time a home changes hands -- rob homeowners of equity, harm their property's value, and lay the groundwork for legal disputes that threaten smooth property transfers.

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