WASHINGTON, D.C. – Today, Congressman Denny Heck (WA-10), Congressman Lee Zeldin (NY-01), and Congressman Charlie Crist (FL-13) led a letter to the Federal Housing Finance Agency (FHFA) urging them to reconsider a recent fee increase on homeowners.
The letter is in response to an announcement by Fannie Mae and Freddie Mac last week that they will begin charging a 50-basis point, or 0.5%, loan level price adjustment (LLPA) on most refinance loans they purchase beginning on September 1. In addition to raising costs on American families without clear justification, this fee runs the risk of hindering the broader economy’s recovery from today’s crisis. In response, Representatives Heck, Zeldin, and Crist led a letter asking the FHFA to prioritize homeowners and economic recovery.
“Right now, Americans are facing unprecedented financial burdens stemming from COVID-19 – and many are finding themselves unable to make mortgage and other payments during this crisis,” said Heck. “This is simply the wrong time to be raising costs on homeowners who have chosen to refinance. What’s more, increasing housing fees during economic recovery has a history of failure. We must learn from the lessons of the 2008 financial crisis and allow American families to recover from this pandemic.”
“Fannie and Freddie’s new refinance fee will hit Florida homeowners squarely in the pocketbook,” said Crist. “For the average middle class family who chooses to take advantage of historically low interest rates, this new Trump Refi Tax could cost an extra $1,400, making it harder and more expensive for Floridians to save on their mortgage. In the midst of a global pandemic and economic meltdown, we should be putting more money in families’ pockets – not raising new fees and taxes. That is why we are calling on FHFA Director Mark Calabria to overturn the new Trump Refi Tax and get Fannie and Freddie back in the business of helping homeowners through these unprecedented times. This should not be a tough call.”
The fee announced by Fannie Mae and Freddie Mac would be put in place on September 1 on refinance loans they purchase. Millions of Americans refinance their mortgages to save money, and as the COVID-19 pandemic has wreaked havoc on American families and the economy, homeowners have taken advantage of low interest rates to refinance to lower their monthly payments or access needed extra cash. Adding refinancing fees to be implemented in mere weeks would place additional costs and uncertainty on borrowers who choose to refinance their mortgage, and risks interfering with economic recovery.
Congressman Heck co-chairs the New Democrat Coalition’s Housing Task Force, which released the report Missing Millions of Homes in the summer of 2018. Since then, Rep. Heck has been fighting for legislation to alleviate the national housing crisis and increase affordability. In the past year he has introduced the Emergency Rental Assistance and Rental Market Stabilization Act, the Emergency Rental Assistance Act (H.R. 6314), the Yes In My Backyard Act (H.R. 4351), the Tribal Access to Homeless Assistance Act (H.R. 4029), a reauthorization of the Native American Housing Assistance and Self-Determination Act (H.R. 5319), and the Fulfilling the Promise of the Housing Trust Fund Act (H.R. 5599). He also cosponsored the Build More Housing Near Transit Act (H.R. 4307) and the Veteran HOUSE Act (H.R. 2398), both introduced by Rep. Scott Peters (CA-52).
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