According to a report released Monday by the National Consumer Law Center (NCLC), the government-sponsored enterprises’ (GSEs) bulk sales of 700,000 home loans to private investors have undermined the goals of supporting and expanding homeownership.

One-half of all residential mortgage loans in the U.S. are insured or owned by the GSEs. A report states that those who lose their homes to foreclosure when the GSEs sell their loans lose access to streamlined foreclosure alternatives.

As outlined in the 28-page report, “How GSE Note Sales Undermine Homeownership,” the agencies should take specific steps to prevent harm to borrowers and communities in the future.

In response to a request for comment, neither Fannie Mae nor Freddie Mac immediately responded.

According to the report, information about more than 545,000 reperforming loans sold is not publicly available. In the case of those that re-defaulted, we don’t know what loss mitigation options were available post-sale or what loss mitigation options were provided after the sale.”

According to the report, the Federal Housing Finance Agency (FHFA) has published data on non-performing loan sales, but these dates are outdated and do not reflect current market conditions. In order to fully understand the fate of loans after they are sold, the FHFA and GSEs lack sufficient data.

NCLC staff attorney and a co-author of the report — Steve Sharpe added that in their assessment of the reports of Fannie Mae and Freddie Mac, they saw gaps in the data and conclusions reported based on control groups that were outdated and do not reflect the present market conditions.

NCLC’s report includes stories from homeowners whose loans were sold to illustrate how the note sales have negatively impacted their families. It also discusses how the GSEs have failed to estimate the harms and concludes that the GSEs are unable to justify note sales with sufficient data analysis.

NCLC recommends further guardrails on note sale programs so that homeowners with GSE loans are protected from foreclosure and promote home retention, including increasing post-sale requirements for buyers and improving data, to minimize the loss of vital foreclosure avoidance options for homeowners with GSE loans.