Fannie, Freddie 0.5 percent mortgage refi fee will kill refi market

Aug. 20, 2020, Fairfax, Va.—Americans for Limited Government President Rick Manning today blasted a new 0.5 percent “adverse impact” fee to be assessed on all mortgage refinances starting Sept. 1:

“At a time when it can already cost thousands of dollars in closing costs to refinance a mortgage, Fannie Mae and Freddie Mac, the two dinosaur quasi-government giants, have decided to implement an ‘adverse impact’ fee of 0.5 percent on all refinances.  President Trump and Federal Housing Finance Agency head Dr. Mark Calabria should be all over the leaders of these two institutions right now over this decision to try to dry up the refinancing market at a time when it is federal government policy to pump as much money into the economy as possible with record-low interest rates to overcome the devastating impacts of the Chinese-originated virus.

“Through this new 0.5 percent tax on home refinances, Fannie and Freddie effectively are saying that they should collect a significant fee on every refinance, taking that money directly out of the pockets of homeowners who are seeking to lower their mortgage costs or pulling some of the dead money out of their homes to use for whatever purposes they deem important.  Apparently, Fannie and Freddie think that it is better for the Treasury to keep pouring money out that America doesn’t have, rather than allowing people to fully take advantage of the equity in their homes.  While to the multi-millionaires who run Fannie and Freddie, a new bureaucratically imposed $500 tax for every $100,000 refinanced may not seem like much, it actually is the difference for many of whether a refinance makes sense at all. This will kill, at least a portion of the market, for mortgage refis.

“According to research firm Equilar and quoted by the Washington Post, ‘At Fannie Mae, five executives earned more than $2 million each last year, while four executives at Freddie Mac earned more than $3 million.’  It seems that a few of these multi-million dollar employees should be out of work due to this outrageous bureaucrat-imposed tax increase that will effectively make some people choose not to access their own money that is within the equity of their own homes.”

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