ICBA and its Minority Bank Advisory Council this week urged the Treasury Department and Federal Housing Finance Agency to reopen negotiations over the Preferred Stock Purchase Agreements for Fannie Mae and Freddie Mac.
Amendments: The changes would:
- Limit Fannie and Freddie purchases of single-family loans with at least two “high-risk” characteristics.
- Limit the percentage of investor properties and second homes to 7% of total purchases.
Impact: In a joint letter, the groups said the restrictions will:
- Harm low- and moderate-income and minority borrowers.
- Undermine closing the homeownership gap among borrowers of color.
- Constrain Minority Depository Institutions and smaller lenders.
- Counter Fannie and Freddie’s affordable housing obligations.
Recommendations: The groups urged the agencies to:
- Delay implementation of the agreements’ product and program restrictions and restart negotiations to remove them.
- Clarify how the restrictions will be tracked and enforced at the lender level.