House Financial Services Chairwoman Maxine Waters (D-Calif.) on Wednesday called on the Federal Housing Finance Agency to kill—not just delay—its controversial 0.5% fee on the refinancing of Freddie Mae and Freddie Mac mortgages.
Under fire for imposing the new fee during the coronavirus economic crisis, FHFA Director Mark Calabria on Tuesday announced that he would delay the effective date of the new fee from Sept. 1 to Dec. 1. The housing agency also announced that Fannie Mae and Freddie Mac will exempt refinance loans with balances below $125,000, nearly half of which are owed by low-income borrowers.
That will not help high-cost areas like Los Angeles, which will be excluded from the “narrow” exemptions from the fee, according to Waters. “I am calling on Director Calabria to terminate this penalty altogether, not just delay it,” she said.
Waters was not alone. The National Association of Federally-Insured Credit Union President/CEO B. Dan Berger questioned whether the fee was needed, as did an official from the American Bankers Association.
“We will continue to urge FHFA to carefully assess whether this fee, even delayed until December, could unnecessarily harm struggling homeowners and the broader economy,” said Joseph Pigg, the ABA’s senior vice president for fair and responsible banking and mortgage finance.