On June 22, 2016 NAR along with 24 other stakeholders sent a letter to FHFA Director Mel Watt. The letter addressed the following key points: 1) The GSEs are double-charging consumers for risk that is already being assumed by existing g-fees. 2) G-fees have increased sharply since 2009. When combined with LLPAs, GSE income has increased substantially but without achieving broad access to credit. 3) No borrower should face arbitrarily high prices for mortgage credit, especially when the burden is felt particularly hard by low- and moderate-income and first-time homebuyers. 4) Policymakers can debate larger issues related to the future of the GSEs but there is no scenario where LLPAs are necessary to cover risk that is already covered by g-fees and other forms of risk sharing. 5) Eight years after the crisis, it is time to eliminate these unnecessary borrower fees once and for all.
Stakeholder Letter to FHFA on LLPAs and Guarantee Fees
Issue Date: June 22, 2016
On June 22, 2016 NAR along with 24 other stakeholders sent a letter to FHFA Director Mel Watt. The letter addressed the following key points: 1) The GSEs are double-charging consumers for risk that is already being assumed by existing g-fees. 2) G-fees have increased sharply since 2009. When combined with LLPAs, GSE income has increased substantially but without achieving broad access to credit. 3) No borrower should face arbitrarily high prices for mortgage credit, especially when the burden is felt particularly hard by low- and moderate-income and first-time homebuyers. 4) Policymakers can debate larger issues related to the future of the GSEs but there is no scenario where LLPAs are necessary to cover risk that is already covered by g-fees and other forms of risk sharing. 5) Eight years after the crisis, it is time to eliminate these unnecessary borrower fees once and for all.
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