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December 19, 2013
NAFCU opposes Fannie, Freddie fee hikes
Dec. 19, 2013 – NAFCU President and CEO Dan Berger yesterday urged the Federal Housing Finance Agency to reverse its plans to increase guarantee fees and loan-level price adjustments for loans purchased by Fannie Mae and Freddie Mac beginning in March 2014.
FHFA announced a 10-basis-points increase in g-fees earlier this month. The agency is also planning to increase its loan-level price adjustment, which is typically passed onto borrowers, for single-family loans with maturities greater than 15 years where borrowers do not make large down payments and do not have high credit scores.
FHFA says it's raising these fees to allow private investors to compete in the secondary market, but NAFCU says they are inappropriate given current conditions.
"NAFCU does not believe that these actions are appropriate because the cost of borrowing will greatly increase and lending will inevitably slow down," Berger said in a letter Wednesday to FHFA Acting Director Ed DeMarco.
Berger said applications for purchase transactions are down 10 percent from the third quarter of 2012 and that lenders have had more than a 50 percent decline in mortgage applications during the same period. That includes refinancings.
He added that many lenders, including a vast majority of NAFCU member credit unions, do not plan to extend mortgages that do not meet the definition of "qualified mortgage" provided in CFPB's ability-to-repay rule that takes effect Jan. 10.
NAFCU is seeking a meeting with FHFA on this issue.
FHFA announced a 10-basis-points increase in g-fees earlier this month. The agency is also planning to increase its loan-level price adjustment, which is typically passed onto borrowers, for single-family loans with maturities greater than 15 years where borrowers do not make large down payments and do not have high credit scores.
FHFA says it's raising these fees to allow private investors to compete in the secondary market, but NAFCU says they are inappropriate given current conditions.
"NAFCU does not believe that these actions are appropriate because the cost of borrowing will greatly increase and lending will inevitably slow down," Berger said in a letter Wednesday to FHFA Acting Director Ed DeMarco.
Berger said applications for purchase transactions are down 10 percent from the third quarter of 2012 and that lenders have had more than a 50 percent decline in mortgage applications during the same period. That includes refinancings.
He added that many lenders, including a vast majority of NAFCU member credit unions, do not plan to extend mortgages that do not meet the definition of "qualified mortgage" provided in CFPB's ability-to-repay rule that takes effect Jan. 10.
NAFCU is seeking a meeting with FHFA on this issue.
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