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The Federal Housing Finance Agency has decided to raise guarantee fees from Fannie Mae or Freddie Mac on mortgages in states that respect the rule of law.
Really, that’s about the size of it.
As Shahien Nasiripour points out today, the g-fees will go up in five states that have slowed the foreclosure process by either mandating mediation before eviction, or created laws that seek to ensure proper documentation in the foreclosure process.
US borrowers in states where home foreclosures are costly and time-consuming will have to pay more for their mortgages, the top housing regulator has proposed.
Lenders originating new loans in New York, New Jersey, Illinois, Florida and Connecticut will be forced to pay US-backed mortgage giants Fannie Mae and Freddie Mac up to 30 basis points extra for their credit guarantee, the Federal Housing Finance Agency said in its proposal.
The fee would probably be passed on to borrowers. The agency said the surcharge would compensate for the increased cost of repossessing homes in the five states, costs ultimately borne by US taxpayers […]
“If those states were to adjust their laws and requirements sufficiently to move their foreclosure timelines and costs more in line with the national average…?the fees imposed under the planned approach would be lowered or eliminated,” the FHFA said.
So the federal conservator of Fannie and Freddie wants to put its thumbs on the scale in favor of faster…
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