The Federal Housing Finance Agency on Friday announced that on Aug. 1, it will eliminate a controversial 0.5% fee on refinancing of Freddie Mac and Fannie Mae mortgages, a fee that the Trump Administration had said was needed to help the Enterprises weather the coronavirus economic crisis.
Credit union trade groups and members of Congress had opposed the fee when it was announced last year. Following vehement opposition, the Trump Administration announced that it would delay the fee until Dec. 1, 2020, and exempt the refinancing of loans below $125,000.
On Friday, FHFA Acting Director Sandra Thompson said the fee will be eliminated. “Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money,” she said, in announcing the change. “Today’s action furthers FHFA’s priority of supporting affordable housing while simultaneously protecting the safety and soundness of the Enterprises.”
FHFA said that the vast majority of Fannie Mae and Freddie Mac borrowers had exited forbearance programs that had been implemented to help borrowers weather the coronavirus crisis.
The Credit Union National Association and the National Association of Federally-Insured Credit Unions had opposed the fee.
On Friday, CUNA President/CEO Jim Nussle praised Thompson’s decision. “CUNA has strongly opposed the adverse market fee since it was announced, and we appreciate Acting Director Thompson for listening to our concerns and rescinding the fee,” said Nussle. “This is an appropriate action given the strength of the current housing market and will lower the cost of refinancing for credit union members.
Senate Banking Committee Chairman Sherrod Brown, D-Ohio, said he was pleased with the move. “Removing this additional charge will help put money back in homeowners’ pockets,” Brown said. “I applaud Acting Director Thompson’s quick evaluation of the need for these charges and her action to make sure we’re not needlessly raising costs for homeowners.”