By Ben Lane

December 22, 2014

The Federal Housing Finance Agency has issued a warning to homeowners, financial institutions and state authorities, citing its concern with super-priority liens created by either energy retrofit programs or homeowner association priority status.The FHFA issued the warning because in some cases a secondary lien on a property forces the Freddie Mac or Fannie Mae lien into a secondary lien position, which the FHFA says increases the risk of losses to taxpayers.

“Fannie Mae and Freddie Mac, while operating in conservatorship, currently support the housing finance market by purchasing, guaranteeing, and securitizing single-family mortgages,” the FHFA said.

“One of the bedrock principles in this process is that the mortgages supported by Fannie Mae and Freddie Mac must remain in first-lien position, meaning that they have first priority in receiving the proceeds from selling a house in foreclosure,” the FHFA continued.  Read more: