FHFA Releases Statement On Eminent Domain
On Aug. 8, 2013 the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, released a statement on the use of eminent domain to restructure performing loans along with an analysis of the implications for Fannie Mae, Freddie Mac and the FHFA. NAR cautions that the impact of such proposals could have a chilling effect on lending in these municipalities and raised these concerns with the FHFA in 2012.
In its statement, FHFA determined that using eminent domain to restructure mortgage loans presented a clear threat to the safety and soundness of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. FHFA sent a clear message to municipalities considering the use of eminent domain indicating it may take one of several actions, including initiating legal action or prohibiting Fannie Mae and Freddie Mac from conducting business activities within jurisdictions that use eminent domain to restructure mortgage contracts.
NAR will continue to work with state and local REALTOR® associations to educate municipal leaders on the potential impact of the use of eminent domain.