Fannie Mae Fee Plan Demonstrates Need for Prompt GSE Reform
NAHB last week came out in opposition to a plan by Fannie Mae to impose an “Adverse Market Delivery Charge” for all mortgages purchased after March 1, 2008.
“Fannie Mae’s new fee is a broad tax on homeownership that ultimately will be passed along to consumers. It’s certain to be more difficult for the housing market to regain its footing when steps are being taken to drive up mortgage costs. This is the exact opposite of what needs to be done and underscores the importance of Congress quickly enacting legislation that would strengthen regulatory oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac while also preserving their vital housing mission,” said Jerry Howard, NAHB’s executive vice president and CEO.
Starting on March 1 Fannie Mae plans to charge lenders an additional 25 basis points across the board for loans purchased for portfolio as well as for loans delivered into its guaranteed mortgage-backed securities. Howard said that it appeared this action was being taken specifically to ensure that Fannie Mae meets a 30% minimum capital surcharge imposed by the Office of Federal Housing Enterprise Oversight (OFHEO) as a result of financial difficulties that Fannie Mae has been working through since 2004.
“This is like a mini perfect storm created by Congress’s inability to pass meaningful GSE reform and OFHEO’s regulatory inflexibility in a time of crisis. So it should be of little surprise to anyone that, under these circumstances, a GSE would resort to a mortgage surcharge to meet capital requirements,” Howard said.
“This is no time for Fannie Mae’s business interests to take precedence over its mission responsibility. NAHB has long opposed government efforts to impose user fees on the GSEs, and this, despite the fact that it is called a necessary result of a down market, is essentially a user fee that is being imposed by Fannie Mae. We oppose it and urge Fannie to reconsider,” he said.
For more information, e-mail David Ledford at NAHB, or call him at 800-368-5242 x8265.