This week, 19 national community organizations called on the Federal Housing Finance Agency (FHFA) to provide more clarity and transparency around the impacts of the agency’s proposed capital requirements for Fannie Mae and Freddie Mac (the Enterprises) before the end of a public comment period on August 31st.
The letter urges FHFA and the Enterprises to provide more information about the impact of the proposed capital rule and the agency’s updated liquidity requirements on mortgage rates, Fannie and Freddie’s cross-subsidization strategy, the mission in their charters and also how the proposal will intersect with the CFPB’s qualified mortgage rules’ safe harbor provisions.
“Without greater transparency from the Enterprises and the agency around these real-world impacts, it will be extraordinarily difficult for the public to meaningfully comment on the proposed rule.” said Jesse Van Tol, CEO of NCRC. “The public needs to understand if the FHFA’s proposal will diminish the role of the GSEs in serving underserved consumers and markets, and which other market participants will serve these markets in their absence. We believe that the FHFA and the GSEs have done more modelling and analysis around all these questions that they can and should make public now.”
FHFA’s proposed capital rule, the agency’s new prescriptive liquidity requirements, penalties for validly underwritten mortgages that go into forbearance post-closing, and a new refinance fee announced this week will exacerbate a variety of challenges for LMI borrowers.
The proposed capital rule, as well as new updated liquidity requirements announced in June and that go into effect Sept. 1, is complex and requires a number of calculations and assumptions in order to grasp the real-world impacts on issues like how much the Enterprises guarantee fees and loan-level price adjustments (LLPAs) may increase, as well as the impact on the Enterprises’ business operations.
Read the full letter:
List of signers:
National Community Reinvestment Coalition (NCRC)
National Association of Realtors
Center for Responsible Lending
Consumer Federation of America
Grounded Solutions Network
Leadership Conference on Civil and Human Rights
National Association of Real Estate Brokers, (NAREB)
National Community Stabilization Trust
National Consumer Law Center (on behalf of its low-income clients)
National Council of State Housing Agencies
National Fair Housing Alliance
National NeighborWorks Association
National Urban League
New Jersey Citizen Action
Pittsburgh Community Reinvestment Group