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Federal Housing Finance Agency Director Mel Watt told NAFCU and others on Monday not to expect any changes in the level of guarantee fees or loan-level price adjustments, stating that the two "continue to strike the right balance."

Watt was responding to a letter sent jointly by NAFCU and 24 other trade associations urging him to further reduce or eliminate loan-level price adjustments charged by Fannie Mae and Freddie Mac because the costs are often passed along to consumers through higher mortgage credit prices.

Watt said the agency conducted a report on g-fees from 2014 and 2015 and "concluded that the overall level was appropriate." (FHFA released its 2015 report on g-fees yesterday.) He added that g-fees and loan-level price adjustments "struck an appropriate balance between safety and soundness and liquidity in the housing finance market."

In their joint letter, sent this June, the trade groups argued that guarantee fees have sharply increased since 2009. With those fees plus loan-level price adjustments, the GSEs' income has increased substantially but without achieving broad access to credit for borrowers. The groups added that through the adjustments, the GSEs are double-charging consumers for risk that is already being assumed by existing g-fees.