Mortgage Daily Logo
mortgage news from industry experts

Judgment Against FHFA Reversed on Appeal

A federal appeals court has overturned a lower court decision against the Federal Housing Finance Agency. At issue are loans on properties with special energy loans.

FHFA issued a directive in July 2010 that prevented Fannie Mae and Freddie Mac from buying loans on properties encumbered by Property Assessed Clean Energy loans.

The regulator was concerned about PACE loans taking priority over mortgages financed by the pair of secondary lenders.

Fannie and Freddie issued letters to lenders the following month indicating that they would no longer purchase mortgages with an outstanding PACE loan.

So the plaintiffs — including the state of California, the county of Sonoma and the city of Palm Desert — filed a federal lawsuit contending that FHFA acted as a regulator, and not as a conservator, when it issued the directive. As a result, FHFA should have gone through the rulemaking process before issuing the directive, according to the lawsuit.

The U.S. District Court for the District of Northern California ruled in favor of the plaintiffs and ordered FHFA to complete a formal rulemaking under the Administrative Procedure Act.

FHFA filed an appeal, and the ninth circuit vacated the district court’s order.

“The panel held that the FHFA’s decision to cease purchasing mortgages on PACE-encumbered properties is a lawful exercise of its statutory authority as conservator of Freddie Mac and Fannie Mae,” the decision stated. “The panel held that the courts have no jurisdiction to review actions that the FHFA takes as a conservator, and dismissed the case.”

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...


Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI

Related Posts