The Community Home Lenders Association opposes any increase in g-fees, and also urges more transparency, and well as complete parity, with respect to g-fee pricing among lenders of different sizes.
The CHLA, in a letter to the Federal Housing Finance Agency, says that it believes that all of these policies are important to promote access and affordability, particularly with respect to borrowers served by community lenders who might be adversely affected by differential pricing or policies.
“Like others weighing in, the CHLA does not believe that further g-fee increases are warranted,” said David Wind of Odyssey Funding and CHLA member. “But we feel an equally important issue is to promote transparency and parity with respect to pricing among different-sized lenders, in order to protect all consumers.”
The CHLA comment letter notes that any g-fee increase would be passed on to borrowers, increasing the cost and affordability of a home purchase, particularly for minority and low-income borrowers.
The letter also questions the effectiveness of g-fee increases as a strategy to bringing private capital back into the market, arguing that risk sharing is a better way to do this.
“Ultimately, we don’t know whether and to what extent there is parity among different lenders with respect to GSE pricing and other important policies. The only remedy to this — and the only way to assure borrowers of fair and equal treatment — is the sunshine of full transparency, as well as periodic reviews of these policies among a cross sample of lenders by size,” said Scott Olson, executive director of the CHLA.
CHLA notes that it would be more open to g-fee increases if they were used to build up Enterprise reserves, but that does not take place under the Treasury Agreement.
CHLA also argued in their comment letter to the FHFA that approximate parity of pricing among lenders was not good enough, and that FHFA should implement an explicit policy of complete parity.
CHLA also noted that there are other areas in which seller lenders can be adversely treated, such as proxies for pricing, the granting of LP/DU waivers, and the terms of seller-servicer agreements. As a result, CHLA asked the FHFA to make all these policies fully transparent.
The letter also encourages the FHFA to undergo detailed periodic reviews of GSE pricing and other policies, with samples that include seller-servicers of different sizes, to determine whether and to what extent disparities exist.