A group of Democratic senators today wrote to FHFA Director Mark Calabria raising concerns about a recent announcement that Fannie Mae and Freddie Mac will impose an “adverse market refinance fee” of 50 basis points for no-cash-out and cash-out refinance mortgages—a move strongly criticized by ABA and several other financial trade associations last week.
“Given the Enterprises’ commitment to facilitating mortgage lending and refinancing over the last few months, we were surprised to see an unexplained new fee added to the cost of refinance loans that will be implemented just three weeks after it was announced,” the senators wrote. “This sudden additional charge will affect loans currently in the refinance process and could cause both confusion and increased costs for homeowners.”
Senate Banking Committee Chairman Mike Crapo (R-Idaho) also wrote to Calabria last week questioning this move by the GSEs and requesting that FHFA respond in writing to several questions about the fee and why the agency deemed it necessary.