Bipartisan group asks for reversal on fees
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News from the office of Senator Tester
BIG SANDY — Following a recent announcement that Government Sponsored Enterprises Fannie Mae and Freddie Mac are establishing a fee on refinanced home loans, U.S. Senator Jon Tester led a bipartisan group of colleagues in demanding that Federal Housing Finance Agency Director Mark Calabria prevent the fee, which would needlessly hurt Montanans in the midst of a global public health and economic crisis.
Tester and his colleagues are calling for a reversal of the FHFA’s decision to allow the fee, noting that increasing burdens on borrowers during the coronavirus pandemic could be disastrous for American families. The GSEs announced last week that the 50 basis point fee on refinanced home loans (.5 percent of the mortgage loan) would be instituted on Sept. 1, and were given the green light by the FHFA without any notice to external stakeholders or consultation with Congress.
As the COVID-19 pandemic continues to cause significant financial strain on American families, many Montanans who are able to do so have taken steps to make their homes more affordable through refinancing, and the GSEs have adopted policies to ease purchase and most refinance transactions. This unexpected new fee, however, would cost a borrower refinancing a $300,000 loan about $1,400—$200 more than the stimulus payment received by Americans earlier this year.
Tester also joined his Senate Banking Committee colleagues in demanding answers from Calabria as to why the fee was instated in the first place, and requesting he put a stop to it:
“We do not know the full effect that COVID-19 will have on our nation’s health or on families’ finances. If families can lower their monthly costs, including housing costs, it would help them weather the public health and economic crisis in the months ahead. An unexpected fee will not,” wrote Tester and his colleagues. “We request that you immediately provide answers to [our questions] and not proceed, or approve of proceeding, with any pricing or policy changes during this pandemic that are not intended to help homeowners, renters, and our housing system withstand this crisis.”
