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Mortgage loan fee increases delayed


 

WASHINGTON – Jan. 9, 2014 – New Federal Housing Finance Agency (FHFA) director Melvin Watt has put off a hike in guarantee fees charged on mortgages purchased by Fannie Mae and Freddie Mac.

Under Watt’s predecessor, former acting director Edward DeMarco, the FHFA announced plans in December to raise guarantee fees by an average of 0.14 percent on a typical 30-year, fixed loan, and by 0.04 percent on a 15-year, fixed mortgage.

In a statement, Watt said he wants to fully understand the implications of fee increases before proceeding with a pricing adjustment.

“The implications for mortgage credit availability and how these changes might interact with the new qualified mortgage standards could be significant,” Watt said. While he may still raise fees, Watt promised increases would be thoroughly investigated, and he would give lenders at least 120 days’ notice about any changes.

“Realtors® applaud the decision by Federal Housing Finance Agency Director Mel Watt to delay increases in guarantee fees on loans purchased by Fannie Mae and Freddie Mac,” says National Association of Realtors President Steve Brown. “We are pleased that Director Watt has agreed to … conduct a thorough evaluation of the proposed changes and their likely impact on mortgage credit availability.”

Source: Chicago Tribune (01/08/14) Podmolik, Mary Ellen

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Related Topics: Mortgages