FHFA

The higher charge on mortgages refinanced through Fannie Mae and Freddie Mac is supposed to cushion against a crisis but could contribute to one as the fees are passed on to struggling consumers.

Mortgage rates crept up this week, nearly reaching the 3% mark as lenders raised prices because of a new fee, although purchase activity remained solid, according to Freddie Mac.

Interest rates jumped from a new record low, while Fannie Mae and Freddie Mac were widely panned for imposing a refinance fee.

The FHFA director’s move this week to impose an “adverse market fee” of 0.5% on most refinanced mortgages will shift billions out of the hands of American consumers and into the hands of Fannie Mae and Freddie Mac — and their private shareholders.

The new “adverse market fee” for refinanced mortgages resembles steps the companies took to combat the 2008 mortgage crisis. But critics charge it isn’t necessary and will hurt borrowers’ ability to tap into low rates.

Earnings reports out this week beat pessimistic expectations, but strained coronavirus relief negotiations in Congress cloud the outlook for what's ahead.

The agency said property owners can enter into new or modified forbearance plans if they have a hardship due to the coronavirus, but the landlords must agree not to kick out renters solely for nonpayment of rent.

Fannie, Freddie also announced they'll face banklike liquidity standards starting Sept. 1.

The mortgage giants will have to meet benchmarks for covering cash flow needs during stressed periods. The FHFA views the requirements as a prerequisite to the companies exiting conservatorship.

Fannie Mae and Freddie Mac have imposed heavy price adjustments for loans that were granted relief under the pandemic relief law enacted in March.