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Comments to FHFA on mortgage fees

Policy Integrity submitted comments to the Federal Housing Finance Agency (FHFA) on its proposal to increase the guarantee fees that Freddie Mac and Fannie Mae charge for single‐family mortgages in the states with the longest average time between default and a final foreclosure sale. This would mean that the costs charged to homeowners for mortgages will be higher in those states with the strongest judicial and regulatory protections against foreclosure.

Our comments stress that Freddie Mac and Fannie Mae are government-sponsored entities, not private ones designed solely to maximize profit. They should approach guarantee‐fee pricing with consideration for the public interest and maximizing net social benefits in deciding whether to institute a fee increase based upon foreclosure timelines.

The FHFA can do this by conducting a more robust cost‐benefit analysis of the proposed policy where it clearly defines the goals of the policy and analyzes the optimal way to reach those goals. To that end, we also recommend that the FHFA describe—and, to the extent possible, quantify—the social benefits that increased foreclosure protections may create.