The Federal Housing Finance Agency recently ordered an increase in fees for borrowers whose loans are backed by Fannie Mae and Freddie Mac. The fees are intended to protect banks against borrowers who default, but ultimately the fees would increase all of the mortgages backed by Fannie Mae and Freddie Mac.
Mel Watt, the new chief of the FHFA, then announced that he will postpone the fees, and perhaps eliminate them all together. I have had the opportunity to evaluate fully the rationale for the plan and the plan’s impact,” Watt said.
CEO of Mortgage Bankers Association, David Stevens, added that the expected increases in mortgages for 2014 “would have increased borrowing costs dramatically…The GSEs are making a lot of money. There’s no rationale for the increases.”
