FHFA Pushes Back Refinance Fee

August 26, 2020 at 8:34 am 1 comment

In one of the most swift and effective lobbying efforts yours truly has seen, the Federal Housing Finance Agency (FHFA) announced it would delay imposition of a 50 basis point mortgage refinance fee on loans sold to Fannie Mae or Freddie Mac until December 1, 2020.

As I explained in a recent blog, FHFA announced on August 12th that Fannie and Freddie would begin imposing the fee on loans sold to the GSEs starting in September.  Since most loans are locked 45 to 60 days in advance of such sales, this meant that mortgage lenders, including credit unions, would have to pay the fee out of their own pocket.  The industry responded quickly and forcefully to this de-facto tax on mortgage lending.

When the fee does take effect in December it is anticipated that it will result in increasing the cost of refinancing by an average of $1,400.

The fact that the FHFA feels that the fee is necessary is the clearest sign yet that the future is far from bright for mortgage lenders who must begin absorbing the cost of forbearances and delinquencies.

 

Entry filed under: COVID-19, Mortgage Lending. Tags: , , , , , .

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1 Comment Add your own

  • 1. Sinta Wiranata  |  August 27, 2020 at 10:27 am

    I’ve watched big money about mortgage crisis in USA at 2018. It was unbeliveable situation that made stock fund was really terrible and had financial crisis. Thank you for this article btw.

    Reply

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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