In shaping the future of the housing finance system, Congress needs to review the patents Fannie Mac and Freddie Mac own on many lending, servicing and secondary market processes, according to the Consumer Mortgage Coalition.
The GSEs control at least 100 patents that reach into almost every sector of the mortgage finance industry. Freddie received its latest patent approval in February.
These patents should be placed in the public domain to ensure a competitive housing finance system “exists in the future,” the industry trade group says in a new letter to key lawmakers.
If Fannie and Freddie were still privately owned companies they could charge lenders and other mortgage-related companies royalties or block them from using their patented processes.
It would be “very damaging” to the industry and consumers if the “GSEs were allowed to use their patents to stifle competition,” CMC says in the April letter.
“In our view, the patents never should have been granted to any one company – let alone to government sponsored enterprises,” CMC executive director Anne Canfield told National Mortgage News.
Now that the GSEs are in conservatorship and dependent on the taxpayers, “it's appropriate to consider putting the patents in the public domain,” she said.
