What is the FHFA fee?

To allow households to save more money, lenders will no longer be required to pay the government-sponsored enterprises a 50-basis point fee when they deliver refinanced mortgages. The fee, which was imposed on December 1, 2020, added a 0.5% charge to total refinance costs.

Are private transfer fees legal in Texas?

In 2011, the Legislature enacted laws regulating, and in large part prohibiting, the use of private transfer fees associated with real property transactions.

What is the difference between FHA and FHFA?

It is entirely separate from the Federal Housing Administration (FHA), which provides mortgage insurance. The FHFA took over the legal and regulatory authority of the entities it replaced. It has the ability to put government-sponsored entities into receivership or conservatorship.

What is a transfer fee covenant?

A “private transfer fee covenant” (sometimes called a “reconveyance fee” or a “capital recovery fee”) refers to a covenant attached to real property that requires a fee to be paid to a third party (frequently the property developer) upon each re-sale of the property, generally for a period of 99 years.

What are the concerns about private transfer fees?

Another concern expressed about private transfer fees is the adequacy of disclosure of these covenants which, in turn, may impede the marketability and valuation of the encumbered property. Consumers may also be unaware that a fee applies even if the resale price of their home drops below the original purchase price.

When do you have to pay a transfer fee?

Developers sometimes will put a covenant in place when a new community is built, requiring that a transfer fee be paid each time a property is sold. Depending on the home and where it’s built, the fee may be in place for decades. The fee, either a flat fee or a percentage of the sales price, is typically paid by the seller.

Why are there transfer fees on home loans?

Developers said the fees allowed them to spread infrastructure costs over a longer period of time rather than as a short-term cost to initial buyers in a community. However, the Federal Housing Finance Agency issued a ruling in 2012 that prohibits private transfer fees on loans guaranteed by Fannie Mae, Freddie Mac,…

Who is the Federal Housing Finance Agency ( FHFA )?

FHFA is an independent agency of the federal government and was established by the Housing and Economic Recovery Act of 2008 (HERA), Public Law 110-289, 122 Stat. 2654, to regulate and oversee the regulated entities.