State attorneys general of Illinois, New York and Connecticut criticized a Federal Housing Finance Agency proposal to increase lenders' guarantee fees for mortgages in those states, asking FHFA Acting Director Edward J. DeMarco to scrap the plan, Bloomberg News reported yesterday. The state attorneys general yesterday said that they oppose allowing the U.S.-owned mortgage finance companies Fannie Mae and Freddie Mac to increase those fees in states with higher foreclosure costs and longer processing times than average. The FHFA in September proposed the higher fees, which compensate for the companies' risks when they own or guarantee mortgages. "The fee increase would impose a penalty on borrowers in states that offer greater statutory protections to homeowners in foreclosure," the attorneys general wrote to DeMarco.
