NAHB, Housing, Consumer Advocacy and Banking Groups Oppose Fannie Mae, Freddie Mac Action to Raise Refinancing Costs
In a move strongly opposed by NAHB, housing, consumer advocacy and banking groups, Fannie Mae and Freddie Mac announced they will charge a 0.5% fee on refinance mortgages they purchase as of Sept. 1.
NAHB believes this action was ill-conceived and could not have come at a worse time. Housing has been keeping the economy afloat during the coronavirus pandemic, so it makes absolutely no sense for Fannie Mae and Freddie Mac to increase financing costs for mortgage borrowers during an economic crisis.
This move, approved by the Federal Housing Finance Agency (FHFA), will hurt families trying to make ends meet in these challenging times and goes against President Trump’s recent executive action calling on federal agencies to do all they can to help renters and home owners to weather the economic effects of this pandemic.
Joint Statement in Opposition
NAHB joined with 19 other housing and banking organizations — including the American Bankers Association, Center for Responsible Lending, Mortgage Bankers Association and National Association of Realtors — to issue the following joint statement in opposition:
“Wednesday night’s surprise announcement by Fannie Mae and Freddie Mac (the GSEs) conflicts with the Administration’s recent executive actions urging federal agencies to take all measures within their authority to support struggling homeowners. The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times. In addition, 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.
“In spite of the fragility of the national economic recovery, the mortgage 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 mortgage-backed securities per month to help reduce the cost of buying or refinancing a home and stimulate the broader economy, this action by the GSEs raises those costs, contradicting and undermining Fed policy.
“The pricing increase is particularly harmful for our nation’s low- and moderate-income homeowners and for the emerging, but unsteady improvements to the national economy. The undersigned organizations strongly urge the Federal Housing Finance Agency, which had to approve this policy, to withdraw this ill-timed, misguided directive.”