Naked Money Grab
8/12, at 7:29pm, in what can only be called a naked money grab, the Government Sponsored Entities (GSE’s) Fannie Mae (FNMA) & Freddie Mac (FHLMC), with the approval of Federal Housing Finance Authority (FHFA) Head Mark Calabria, dropped a nuclear bomb on the mortgage industry, housing industry, and homeowners nationwide.
The nuclear bomb is a new .5% of the loan amount fee added to every closed refinance transaction securitized and delivered to the GSE’s on or after September 1, 2020. This impacts borrowers whose loans are not yet locked but in process, homeowners shopping for a refinance, and lenders who have locked loans closing later this month that this fee was obviously not budgeted into. One of my best wholesalers told me this morning that this naked money grab will cost her company $40,000,000 alone in the next 3 weeks. Now multiply that figure by every major national lender, bank, credit union, and mortgage company nationwide funding conventional refinances and you can see the idiocy of this directive and the urgency for action.
This naked money grab flies in the face of the Trump Administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners. It also flies in the face of recent Federal Reserve policy directives of keeping interest rates low, markets stable, and credit availability high.
The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic. The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the GSEs and taxpayers. At a time when the Federal Reserve is purchasing $40 billion in agency MBS per month to help reduce financing costs for mortgage borrowers to support the broader economy, this action raises those costs and undermines the Federal Reserve’s policy. Meanwhile, as Congress considers providing another $1200 stimulus payment for households, FHFA just took an average of $1400 from any looking to refinance. This directive is bad for our nation’s homeowners and the nascent economic recovery.
Please follow the link below to add your name to a petition going to our representatives in Washington asking them to reverse this disastrous policy and bumbled & ill-timed roll out. It only takes a minute and will help everybody in the housing and mortgage industry as well as Main Street America. Click Here
Thanks in advance for your help and PLEASE forward this e-mail to all your friends and contacts. We are all affected by this!!!!!
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