Freddie Mac confirms fee reversal for credit unions
The Credit Union National Association (CUNA) quickly secured confirmation last week: Freddie Mac will reverse course and refrain from imposing fees on mortgage sellers and servicers--including credit unions--that do not meet minimum activity thresholds.
The government-sponsored enterprise, on May 15, had announced that effective January 1, 2014, sellers and servicers that did not meet minimum activity thresholds for the prior calendar year would have been assessed a fee of $7,500 for low activity. Sellers and servicers would have had to sell loans with an aggregate unpaid principal balance of $5 million, or service or act as servicing agent for loans with an aggregate unpaid principal balance of $25 million in the prior calendar year, to avoid the fees.
Freddie Mac has changed course, stating that the fee will only apply to lenders that have Freddie Mac approval but do not sell or service any of the company's mortgages. As long as a lender handles or writes at least one Freddie Mac loan over a three-year period, it will be able to avoid the fee.
"This is a welcome development," CUNA President/CEO Bill Cheney wrote in a letter sent to Freddie Mac CEO Donald Layton. "The fee would have unfairly burdened credit unions in rural and underserved areas where annual real estate sales activity and housing prices are not high enough to generate the dollar figures that meet Freddie Mac's thresholds," he said.
Earlier, CUNA requested that the decision imposing these fees be revisited in a letter sent to Federal Housing Finance Agency Acting Director Ed DeMarco. It also was a topic of the testimony given by CUNA witness Jerry Reed of Alaska USA Federal Credit Union to the House Financial Services subcommittee on financial institutions and consumer credit.