Removing Barriers Blog

CUNA & Leagues write to Director Calabria prior to Agency's delay of GSE refi fee
Posted August 25, 2020 by CUNA Advocacy

CUNA, AACUL, and all of the state credit unions Leagues wrote to Director Calabria detailing the impact of the fee and urging a delay of the implementation of the GSE refinance fee.  CUNA had previously written the Director and joined other trades in strong opposition of the fee.

“Credit unions provide consumers with good faith estimates of closing costs, interest rates and other loan terms well in advance of loan closing so they can understand and determine if refinancing will help them reduce monthly payments, pay off high interest debts and/or make a large purchase,” the letter reads. “Unfortunately, the fee’s September 1, 2020, effective date has caused significant disruptions to applications throughout credit union loan pipelines.”

Later in the day, the Federal Housing Finance Agency (FHFA) announced it will delay implementation of its GSE refinance fee until December 1, past the original effective date of September 1. The Agency also announced that Fannie Mae and Freddie Mac will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower income borrowers at or below 80% of area median income. Affordable refinance products, in Fannie Mae’s Home Ready and Freddie Mac’s Home Possible programs, are also exempt.

“We thank FHFA for the action it took today related to the proposed adverse market fee,” said CUNA President/CEO Jim Nussle.  “Delaying the implementation of the fee until December will protect locked-in loans in credit union pipelines from this fee and exempting loans under $125,000 will help protect low and moderate income borrowers looking to refinance their mortgages from bearing added costs at this challenging time. This is a positive step and we appreciate it.”

According to FHFA, the fee is necessary to cover projected COVID-19 losses of at least $6 billion at Fannie and Freddie, due to actions taken during the pandemic to protect renters and borrowers.