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Washington
FHFA guarantee fee changes could impact CUs CUNA
WASHINGTON (12/3/12)--The Federal Housing Finance Agency's (FHFA) plan to adjust the guarantee fees that government-sponsored enterprises (GSE) Fannie Mae and Freddie Mac charge for single-family mortgages will have a discriminatory effect on credit unions and other smaller financial institutions, the Credit Union National Association(CUNA) said in a comment letter.

The planned FHFA adjustments would increase the guarantee fees for single-family mortgages in states where GSE costs related to state foreclosure practices are higher than the national average; these states are Connecticut, Florida, Illinois, New Jersey, and New York.

The FHFA considered three factors as it developed the guarantee fee methodology. Those factors are:

  • The expected number of days it takes a GSE to foreclose on a home in a particular state;
  • The average per-day carrying cost that the GSEs incur in that state; and
  • The expected national average default rate on single-family mortgages acquired by the GSEs.
In the comment letter, CUNA Assistant General Counsel Luke Martone suggested that other factors be considered, such as the number of foreclosures over a set period of time, and how factors beyond the control of lenders or consumers, such as state law provisions on foreclosures or judicial review of foreclosure proceedings, affect the processing of foreclosures.

Overall, the comment letter encouraged the FHFA to work with lenders of all types and sizes, including credit unions, to reform the secondary market and to promote the housing market recovery.

For the full comment letter, use the resource link.


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