Realtors Attack Fannie Fee Increase

The National Association of Realtors is demanding an explanation for Fannie Mae's latest loan fee hike, warning that it could push more borrowers into Federal Housing Administration loans and counter the government's effort to lower the cost of mortgage financing. In a letter to the GSE's regulator, Realtors president Charles McMillan notes that Fannie provided no "justification or even explanation for the increases" even though it is operating in conservatorship and under government control. A Federal Housing Finance Agency spokeswoman said the agency is "reviewing the Realtors' letter." Fannie Mae continues to charge a 25 basis point adverse market fee on all loans. Starting April 1, Fannie Mae is raising its delivery fees on certain cash-out refinancings, two-unit properties, condominiums, interest-only loans and loans with subordinate financing, according to a Dec. 29 letter to its lenders. The standard delivery fee on a mortgage to a borrower with a 670 credit score and a 20% down payment would go up by 75 basis points to 2.5%. "Is the purpose of increasing fees to shift higher risk borrowers to the FHA insurance program? What will the impact of such a move be in terms of risk and cost to the government and the taxpayer?" the NAR letter says.