WASHINGTON (1/9/14)--Credit Union National Association President/CEO Bill Cheney on Wednesday lauded new Federal Housing Finance Agency Director Mel Watt's decision to delay planned guarantee fee increases.
CUNA in recent weeks urged the FHFA not to go forward with these fee increases.
Under former acting Director Ed DeMarco, the FHFA had planned to increase base guarantee fees for all mortgages by 10 basis points, update the up-front guarantee fee grid to better align pricing with the credit risk characteristics of the borrower, and eliminate the up-front 25 basis point adverse market fee, except in the four states whose foreclosure carrying costs are more than two standard deviations greater than the national average.
The FHFA said these fee structure changes would result in average guarantee fee increases of approximately 11 basis points based on loan purchases of Fannie Mae and Freddie Mac in the third quarter of 2013.
"Over the last several years the FHFA has continued to allow guarantee fees to steadily increase, making home lending unnecessarily expensive for lenders and borrows. For the benefit of many American homebuyers, we hope that moving forward the FHFA will help curtail these fee increases," Cheney said.
Watt in a Wednesday release said he will thoroughly evaluate the proposed fee changes as expeditiously as possible, and would give not less than 120 days' notice after completing the evaluation before implementing any changes. Watt said he wants to fully understand the impact fee changes could have on mortgage credit availability, and how these changes might interact with the new qualified mortgage standards, before deciding whether to move forward with any adjustments.