To avoid the fee, banks must sell at least $5 million in loans to Freddie per year or service at least $25 million in loans.
Assessing this unaffordable fee will force many community banks to sell their servicing portfolios and terminate their relationship with Freddie, ICBA says in a letter to the GSE and the Federal Housing Finance Agency.
It will also limit access to mortgage credit in those communities, which is inconsistent with Freddies statutory purpose. And it is contrary to FHFAs goal to ensure fair and impartial access to GSE products and services.
These thresholds are sending a message to the mortgage industry that Freddie Mac only wants to do business with the largest lenders, the ICBA letter says.
In a separate letter, ABA warns that a new fee will have a devastating impact on many community banks ability to remain Freddie Mac seller/servicers.
In addition, it runs counter to FHFAs policies, which requires Fannie Mae and Freddie Mac to avoid any unwarranted policies or practices that favor large institutions to the disadvantage of smaller institutions, ABA says.
“Given the important role played by the Enterprises in providing the bulk of secondary market access for lenders of all sizes during this nascent housing recovery, it is imperative that this fee be reconsidered before its harmful effects can diminish the presence of community banks in the mortgage market, said ABA senior vice president Bob Davis.