Removing Barriers Blog

CUNA writes to Director Calabria in strong opposition to fee increase
Posted August 14, 2020 by CUNA Advocacy

CUNA continued its strong opposition to a recently announced Fannie Mae and Freddie Mac fee increase for certain purchased refinanced mortgages. In a letter sent to Federal Housing Finance Agency (FHFA) Director Mark Calabria, a day after CUNA joined a broad a coalition of organizations representing housing, financial services industries as well as public interest groups to issue a statement calling for the fee, scheduled to begin September 1, to be withdrawn.

"This late night, peremptory proclamation by the GSEs threatens to undercut the mortgage market for borrowers who are benefitting from refinancing in an environment of historically low interest rates. Given the serious challenges faced by American families due to the economic impacts of COVID-19 emergency, we are unable to understand why the GSEs would be encouraged or allowed to undermine the mortgage refinancing market, one of the few bright spots in our economy at the moment. Refinanced mortgages can lower payments for borrowers and provide them with liquidity needed to pay off high interest debt, make needed home repairs or provide funds for a purchase. Not only will this decision raise costs for credit union members and other borrowers, it may ultimately price some of our most vulnerable potential homeowners out of the market."

The letter also noted that the credit union mission to meet the credit and savings needs of consumers, especially persons of modest means, has “never been more critical than now,” and that the substance and timing of the fee “makes these challenges more difficult to overcome.”

He added that the September 1 date for imposing the fees “appears to have been made without consideration for borrowers who are midstream in their refinancing applications but have not locked in their interest rates, or for virtually-staffed credit unions who closed on loans that may not be delivered for sale before September 1.”