U.S. Sen. Thom Tillis (R-NC) has urged the Federal Housing Finance Agency (FHFA) to withdraw a new mortgage refinancing fee that would raise costs for struggling borrowers and consumers.
Sen. Tillis and his colleagues sent a letter on Aug. 20 to FHFA Director Mark Calabria requesting the agency withdraw a 0.5 percent market refinance fee that was recently announced by Fannie Mae and Freddie Mac, both government-sponsored enterprises (GSEs). The GSEs will begin imposing the surcharge on mortgages after Sept. 1, according to the senator’s office.
“That the Federal Housing Finance Agency (FHFA) would allow the GSEs to take this course of action, during what is universally agreed to be a period of great economic distress, is surprising and deeply troubling,” the senators wrote. “We therefore request that you immediately act to require that the GSEs withdraw this fee to prevent further harm to everyday Americans and our economy.”
The lawmakers noted that the GSEs play a crucial role in mortgage finance and without them, it would be far more challenging for middle-class families to be able to afford a 30-year fixed-rate mortgage.
However, Sen. Tillis and his colleagues stated it was “greatly distressing” that FHFA and the GSEs would announce a 50 basis point fee for all refinancing loans with no consultation with Congress.
“Beyond harming borrowers and lenders, the $1,400 that this fee would cost a borrower refinancing a $300,000 loan is more than the $1,200 that taxpayers have received in recovery rebates from the federal government,” the senators noted in their letter.