“NAFCU does not believe that these actions are appropriate because the cost of borrowing will greatly increase and lending will inevitably slow down,” NAFCU president and chief executive Dan Berger says in a letter to the GSE regulator.
FHFA acting director Edward DeMarco has directed Fannie and Freddie to raise their loan guarantee fee by 10 basis points and raise their loan-level price adjustment fees on mortgages with maturities greater than 15 years and HARP refinancings. These fee hikes are slated to go into effect April 1.
Lenders are concerned that higher LLPA fees will make it harder to originate small-balance loans and still comply with a 3% points and fees cap in the qualified mortgage rule that goes into effect in January.
Berger notes in his letter to DeMarco that the vast majority of credit unions plan to originate solely QM loans.
“NAFCU is convinced that these changes will have an adverse impact on our nation’s credit unions and their 97 million members,” the CEO says in the Dec. 18 letter.
The Senate recently voted to confirm Rep. Mel Watt, D-N.C., to be the new GSE regulator. Watt is not expected to be sworn in as the new FHFA director until January—possibly on Jan.6.
Some industry trade group officials are hoping Watt, as the new GSE regulator, will review and stop the g-fee and LLPA fee hikes.