Urgent: Action Needed! Tell Congress: Urge FHFA and the GSEs to Withdraw Adverse Market
Aug. 13, 2020
By now, you have read the just-released lender letters from Fannie Mae and Freddie Mac. For the past 48 hours, MBA has been working to understand and block the anticipated imposition of a 50-basis point adverse market fee on refinance loans purchased by the GSEs. Last night, we released the attached statement to the media.
This directive flies in the face of the Administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners. Requiring Fannie Mae and Freddie Mac to charge a 0.5% fee on refinance mortgages they purchase will raise interest rates on families trying to make ends meet in these challenging times. This means the average consumer will be paying $1,400 more than they otherwise would have paid. Even worse, the September 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing.
· Why it matters: The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic. The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the GSEs and taxpayers. At a time when the Federal Reserve is purchasing $40 billion in agency MBS per month to help reduce financing costs for mortgage borrowers to support the broader economy, this action raises those costs and undermines the Federal Reserve’s policy. Meanwhile, as Congress considers providing another $1200 stimulus payment for households, FHFA just took $1400 from any looking to refinance. This directive is bad for our nation’s homeowners and the nascent economic recovery.
· What’s next: We will be working tirelessly in the days ahead with our financial services and housing industry colleagues and Congress to roll back this deeply misguided FHFA policy. This directive undermines both Federal Reserve policy to keep rates low, and the administration’s recently announced directives to support homeowners.
As a member of MAA, we need you to contact your Senators and Representative and urge them to contact FHFA Director Calabria and the CEOs of the GSEs and insist that they immediately withdraw this deeply misguided directive.
Maryland Mortgage Bankers and Brokers Association P.O. Box 994 Edgewater, MD 21037 Phone: (443) 574-7786 | Email: [email protected]