When questioned about the steep fee the GSEs charge to buy early forbear-ance loans, the FHFA director turned the tables on the lawmakers: Why didn’t Congress pay for it in the CARES Act?
The Structured Finance Association said it is concerned FHFA believes that, if the GSEs have capital levels similar to banks, the need for an explicit guarantee will be eliminated.
Nonprofit groups said the new rule will lead to higher guarantee fees, potentially pricing many low-income families and families of color out of the GSE channel.
The panel this week heard testimony that servicers failed to inform borrowers of their right to forbearance, offered less assistance than required by law and provided inaccurate information on lump-sum repayments.
Since the financial crisis, Fannie’s single-family book of business has posted a loss rate of 31.5 basis points. In contrast, residential loans at commercial banks averaged a loss rate of 86 bps, 5.7 times higher.
In its annual report to Congress, the FHFA recommended legislation that will allow it “to examine the records, operations and facilities” of all Fannie/Freddie servicers.
An FHFA spokesperson said that, while Director Mark Calabria hasn’t issued a specific directive on providing credit, he has made it very clear that Fannie and Freddie must prioritize their own safety and soundness.