WASHINGTON—The Senate Banking Committee will be holding a hearing today on “The Federal Housing Finance Agency: Balancing Stability, Growth, and Affordability in the Mortgage Market.”
The hearing could touch on a couple of issues of importance to credit unions, including ensuring the housing finance system provides credit unions with unrestricted access to the secondary mortgage market, regardless of asset size. That access could be affected by a proposal made by the Federal Housing Finance Agency that would alter the ability of financial institutions to join the FHLB.
According to NAFCU, at mid-year 2014 19% of CUs belonged to the FHLB. Credit unions are also watching the FHFA and responses to its recent Request for Input on the guarantee fees (g-fees) that Fannie Mae and Freddie Mac charge lenders.
“Raising g-fees would result in a negative impact on the housing market,” NAFCU wrote to the committee in a letter ahead of the hearing. “The cost of borrowing will greatly increase and lending will inevitably slow down. Rather than increasing g-fees, NAFCU believes reducing g-fees or keeping them at their current level is necessary to the continued recovery and stabilization of the housing market. In NAFCU’s August 2014 Economic and CU Monitor survey, 81% of NAFCU members polled indicated that the current level of g-fees should remain. Further, loan originations would inevitably decrease if the Enterprises continued to raise g-fees because the rising cost of mortgage lending would either need to be absorbed by the lender or passed on to the borrower, in the form of risk based fees or higher interest rates.”
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