Freddie Mac and Fannie Mae "compromised" the purposes of affordable housing goals by engaging in several large and "questionable" mortgage transactions in 2003, according to a report by the majority staff of the House Financial Services Committee."These large-scale transactions did not violate the letter of the law," the staff report says. "However, there is a legitimate question as to whether the GSEs violated the spirit of the housing goals." The multibillion-dollar transactions allowed the two government-sponsored enterprises to hold residential and multifamily loans for goal purposes, even though the sellers had the right to dissolve the transactions and take back the loans without forfeiting the premiums they receive from the GSEs. Committee staffers also found that some of the transactions contained old mortgages (10-20 years old), which does not contribute toward increasing affordable housing. "The fact that many of the loans have been in repayment for over a decade and are included in transactions that can be collapsed without penalty by the seller means that the purposes of the affordable housing goals have been compromised," the report says.

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