WASHINGTON–With its new director confirmed and in place, the Community Home Lenders of America has sent a letter to the Federal Housing Finance Agency (FHFA) outlining what it says are the “appropriate role” for Fannie Mae and Freddie Mac in “fulfilling their statutory affordable housing mission.”
In the six-page letter to Director Bill Pulte, who was just confirmed to lead the agency, the CHLA lays out its priorities for “protecting” small IMB mortgage lenders and the GSE affordable housing mission.
Four Recommendations
The four key recommendations in the CHLA letter are:
- Fannie and Freddie should maintain their affordable housing footprint, including condo, investor, and second home loans – without volume caps or fee increases unrelated to risk.
- Fannie and Freddie should strictly adhere to PSPA cash window requirements – and should not arbitrarily reduce the number of seller-servicers, out of convenience or to cut costs.
- Fannie and Freddie should complete the process of replacing repurchase demands for performing loans with loan defects with an indemnification fee based on Enterprise risk.
- Fannie and Freddie should take actions to cut mortgage origination costs – e.g., rejecting bi-merge in favor of tri-merge and addressing FICO’s monopolistic credit score price hikes.
Additional Points Made
The CHLA said it appreciates the first Trump administration’s actions to create a permanent equitable cash window requirement and expressed support for the administration’s interest in moving forward on a Fannie and Freddie exit from conservatorship.
The two secondary market mortgage giants have been in conservatorship since the financial and housing crisis of 2009.
The CHLA said in the letter its primary interest is in Fannie and Freddie maintaining their commitment to their affordable housing mission – identifying reasons why they should not shrink their housing footprint, including addressing investor loans and second homes, which were the subject of restrictions in 2020.
