The Independent Community Bankers of America (ICBA) is among several groups calling on the Treasury Department and Federal Housing Finance Agency to delay and withdraw new restrictions on Fannie Mae and Freddie Mac.
The restrictions relate to a recent amendment to the Preferred Stock Purchase Agreements between Treasury and the government-sponsored enterprises. The restrictions include a volume cap on sales through the GSE cash window and purchase restrictions on certain loans, including affordable housing. These changes would disrupt the housing market and limit access to affordable mortgage credit, particularly for low- and moderate-income or minority borrowers.
“There is little question these changes will not only alter the role and obligations of Fannie Mae and Freddie Mac but will also have significant impacts on borrowers, lenders, servicers, and affordability. Some of the proposed limits on single-family acquisitions will have a disproportionate impact on borrowers of color as well,” the letter to Treasury Secretary Janet Yellen and FHFA Director Mark Calabria stated.
ICBA signed the letter along with the Community Home Lenders Association, the Leadership Conference on Civil and Human Rights, the National Association of Federally-Insured Credit Unions, the National Community Reinvestment Coalition, the Community Mortgage Lenders of America, and America’s Homeowner Alliance.
“This letter is also intended to underscore that a wide and diverse spectrum of stakeholders have significant concerns that the PSPA amendments are the latest in a number of meaningful regulatory decisions made without appropriate transparency or guidance. These changes will adversely affect pricing, loan product development, affordable housing, and other Enterprise activities, which are expected to facilitate affordable homeownership for borrowers and fair and equal access to the secondary market that enable lenders to serve their customers. Elements of the PSPAs will constrain future liquidity in the mortgage market and will undercut access to mortgage credit for low- and moderate-income (LMI) borrowers and for borrowers of color,” the missive continued.
The groups are urging the agencies to delay implementing these restrictions and remove them from the PSPAs.
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