The incoming Federal Housing Finance Agency director will delay a planned increase in mortgage lending fees pending the opportunity for him “to evaluate fully the rationale for the plan,” according to a statement from the agency.
The U.S. Senate confirmed Mel Watt on Dec. 10, and he will be sworn in on Jan. 6. Mortgage finance companies Fannie Mae and Freddie Mac, which the FHFA oversees, recently announced plans to raise loan fees in an attempt to make non-government-backed lending more competitive. The increases, which would be passed down to borrowers in the form of higher rates, are slated to take effect in March.
In his Dec. 20 statement, reported by the Wall Street Journal, Watt said that he also wants to evaluate “the plan’s likely impact on the [companies'] risk exposure, the cost and availability of credit and how the plan would interface with the qualified mortgage standards.”
He added that he will elaborate further after the FHFA swearing-in.
“I felt that it was important to announce my intentions now because of the prospect that some lenders could start to price the announced changes into the market well before the effective dates of the changes,” he added in the statement. [WSJ] — Julie Strickland