The Federal Housing Finance Agency (FHFA) has sent to the Federal Register a notice that expresses its concern with the proposed use of eminent domain laws to seize and restructure underwater mortgages.
‘As conservator of Fannie Mae and Freddie Mac and regulator of 12 Federal Home Loan Banks, FHFA has significant concerns about the use of eminent domain to revise existing financial contracts and the alteration of the value of the companies' securities holdings,’ says the agency in a press statement.
‘FHFA has determined that action may be necessary on its part to avoid a risk to safe and sound operations at its regulated entities and to avoid taxpayer expense,’ says the FHFA. ‘Additionally, FHFA has concerns that such programs could negatively affect the extension of credit to borrowers seeking to become homeowners and on investors that support the housing market.’
The agency is accepting public submissions on the issue through Sept. 7. Submission may be sent to email@example.com.