The lawmaker is demanding that the universally loathed fee – postponed until Dec. 1 – be scrapped altogether
The Federal Housing Finance Agency announced last week that it would postpone implementation of its universally loathed Adverse Market Refinance Fee (AMFR) from Sept. 1 to Dec. 1 – but that isn’t enough for one top lawmaker, who is demanding the fee be scrapped entirely.
When Fannie Mae and Freddie Mac announced earlier this month that they would add the 50-basis-point fee to the cost of most refinance loans, industry reaction was swift and brutal. Mortgage and real estate organizations condemned the fee, saying it was directly at odds with the administration’s stated goal of keeping housing affordable during the pandemic. Lawmakers on both sides of the aisle decried the fee, and the banking associations of all 50 states, plus Puerto Rico, wrote to FHFA Director Mark Calabria demanding that the AMFR be rescinded.
Facing intense industry pressure, the FHFA announced last week that it would postpone implementation of the AMFR until December. The agency also announced that refinance loans with balances below $125,000 would be exempt from the fee, as would Home Ready and Home Possible refi products.
However, that compromise wasn’t good enough for Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee. Waters, who together with Rep. William Lacy Clay (D-Mo.) had earlier spoken blisteringly of the AMFR, demanded that the fee be scrapped entirely.
“Just two weeks ago, Director Calabria approved an outrageous penalty – in the middle of a pandemic and an economic recession – that would apply to homeowners looking to use today’s historically low mortgage rates to refinance their mortgages and reduce their mortgage payments,” Waters said. “Now, after bipartisan backlash, Director Calabria is attempting to save face by delaying the penalty until December 1st and then only providing very narrow exemptions moving forward. While this delay will buy homeowners looking to refinance some time, at the end of the day, the vast majority of homeowners will still pay the penalty – and homeowners in higher-cost areas like Los Angeles will disproportionately be excluded from the narrow exemptions provided. I am calling on Director Calabria to terminate this penalty altogether, not just delay it.”
Waters isn’t the only one who has called for the AMFR to be scrapped altogether. After the fee was announced, the Independent Community Bankers of America (ICBA) called the decision “the wrong action at precisely the wrong time” and called on the FHFA “to rescind this destructive and unnecessary tax on homeowners immediately.”