Feds move to restrict private transfer fees

Fannie, Freddie would be barred from investing in encumbered loans

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.