Letter to The Honorable Mark A. Calabria, Director of the Federal Housing Finance Agency - Tester Demands Housing Agency Reverse Decision to Charge Fee for Refinanced Home Loans

Letter

Dear Director Calabria,
Thank you for the work that you and your staff are doing to promote the smooth and orderly
functioning of America's housing market during these turbulent times. We write in regard to the
market refinance fee that was recently announced by the Government Sponsored Enterprises
(GSE) Fannie Mae and Freddie Mac. That the Federal Housing Finance Agency (FHFA) would
allow the GSEs to take this course of action, during what is universally agreed to be a period of
great economic distress, is surprising and deeply troubling. We therefore request that you
immediately act to require that the GSEs withdraw this fee to prevent further harm to everyday
Americans and our economy.
Members of Congress on both sides of the aisle may have differing opinions as to the nature of
the GSE conservatorship arrangement, but the crucial role that the GSEs play in our housing
market is indisputable. Absent their role in mortgage finance, it would be harder or perhaps even
impossible in these times for middle-class families to afford a 30-year fixed rate mortgage. For
families who have been fortunate enough to become homeowners before the onset of the
COVID-19 pandemic, the GSE guarantee has allowed such families to take advantage of
historically low interest rates and gain much-needed financial flexibility through the mortgage
refinancing process.
It is therefore greatly distressing that FHFA and the GSEs would announce a 50 basis point fee
for all refinancing loans with no consultation with Congress and no notice to external
stakeholders. While there is precedent for this type of charge going back to 2007, the 2007
charge was announced on December 5, 2007, and implemented on March 1, 2008. That's over 11
weeks of notice compared to the two weeks for this most recent fee. A two-week timeline is
excessively fast and pulls the rug out from consumers and lenders alike who are in the process of
refinancing. We sincerely hope that lenders and consumers will not feel blindsided, and that this
fee will not further curtail lending during this challenging period.
This type of fee is difficult enough to price in during the best of times; in the midst of a global
health pandemic with a vaccine not yet in sight, there is no rational explanation for this course of
action in the manner and speed that you have taken. Beyond harming borrowers and lenders, the
$1,400 that this fee would cost a borrower refinancing a $300,000 loan is more than the $1,200
that taxpayers have received in recovery rebates from the federal government.
Sincerely,
M. Michael Rounds Tina Smith
United States Senator United States Senator
Kevin Cramer Thom Tillis
United States Senator United States Senator
Jerry Moran Steve Daines
United States Senator United States Senator
Jon Tester Martha McSally
United States Senator United States Senator