Texas Bankers Association Statement on Surprise FHFA Refinance Adjustment
The Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, has announced it will implement a “New Adverse Market Refinance Fee” adjustment for all refinance transactions of 0.5% of the loan amount. This change will be applied beginning September 1.
“In light of market and economic uncertainty resulting in higher risk and costs incurred by Fannie Mae, we are implementing a new loan-level price adjustment (LLPA),” the Fannie Mae announcement stated. A similar announcement by Freddie Mac said the adjustment was a “result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”
In reaction, Texas Bankers Association President and CEO Chris Furlow made the following statement:
“In the midst of a national health and economic crisis, the move by FHFA was particularly tone deaf. To them it was a 0.5% “adjustment,” but for average homeowners that’s $1,400 in real money. FHFA needs to quickly admit they made a mistake and rescind it. Texas bankers have worked tirelessly to assist small businesses, homeowners, and communities during the COVID-19 pandemic, and we will stand with them to oppose this action by FHFA.”