“Unfortunately, we believe homebuying taxpayers are being charged excessive fees due to questionable agency policy goals,” NAR president Steve Brown says in a letter to FHFA acting director Edward DeMarco.
The Realtors agree that more private sector participation would create a more balanced mortgage market. But private-label MBS investors have not forgotten the tremendous losses they suffered during the financial crisis. And the FHFA is not taking this “lack of trust” into account as it continues to increase GSE fees.
“We believe that future data will show that the effect of raising fees will simply be increased cost to homebuying taxpayers who can afford to become homeowners and redirect more mortgage loans to FHA without enticing the private sector back into the market,” says Brown.
The FHFA recently announced it will increase GSE loan guarantee fees by 10 basis points this spring and raise the loan-level adjustment fees.
The Community Mortgage Lenders of America believes the GSEs are already charging enough fees to cover their risk profile, according to Rob Zimmer, CMLA’s head of external affairs. And raising the loan-level adjustment fees will only penalize first-time homebuyers.
“There are judicious ways of shrinking the GSEs and there are pernicious ways of shrinking them. These LLPAs are just pernicious,” Zimmer says.
DeMarco’s goal has been to shrink the GSEs to bring more private capital into the mortgage market, according to Community Home Lenders Association executive director Scott Olson.
“But you don’t want to exit the market and find no one is stepping in,” Olson says. “FHFA needs a plan to ensure private capital will step in and in a scale that is necessary to replace the role of the GSEs.”