Will Raising Mortgage Fees Bring Back Private Capital?

Industry groups are questioning the Federal Housing Finance Administration’s (FHFA) raising of fees as a means to encourage private capital back into the mortgage market. The National Association of Realtors (NAR) president Steve Brown says homebuyers are being charged excessive fees “due to questionable agency goals.” The FHFA intends to raise loan guarantee fees by ten basis points this spring, and increase the loan-level adjustment fees as well. Brown states the higher fees will just hike the cost of purchasing a home and send more mortgage loans to the Federal Housing Administration (FHA) without bringing more private sector involvement into the market. According to nationalmortgagenews, the Community Mortgage Lenders of America (CMLA) says the GSEs (government-sponsored enterprises) are already charging enough to cover their risk, and raising fees will penalize first-time homebuyers. CMLA Executive Director Scott Olson tells MHProNews the FHFA’s goal has been to shrink the GSEs role, but the agency needs to make sure private capital will sufficiently fill the role of the GSEs.

(Image credit: hansfax.com)

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