WASHINGTON—CUNA, along with nine financial services organizations, is concerned a provision of an appropriations bill could raise U.S. Department of Housing and Urban Development (HUD) fees for credit unions and other financial institutions.
The provision in the Transportation, HUD and Related Agencies Appropriations Act for Fiscal Year 2015 (S. 2438) would grant HUD's request to charge lenders an administrative support fee, which would generate approximately $30 million per year to fund an enhanced quality assurance program for single-family loans.
In a joint letter to Senate and House leadership, the group supports the goal of improving Federal Housing Administration (FHA) quality assurance processes, but considers the provision in S. 2438 to be "overly broad, and could negatively impact consumers and lenders alike," CUNA reported.
The fee, as proposed, is not to exceed four basis points of the original principal balance of loans originated by the mortgagee that were insured during the previous fiscal year.
But CUNA reported the group is worried that the fee will be calculated using the previous year's mortgage originations instead of new originations, raising costs on mortgages that have already been originated and insured. The group proposes that if the provision is included in a final bill, it should be calculated on a prospective basis.
The organizations are also concerned about the overall size of the fee, as well.
"The legislation allows FHA to charge as much as four basis points on aggregate lender originations, far in excess of what it needs,” the letter stated. “And because the fee is not limited only to FY2015, HUD would be permitted to levy this charge in future years."
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