Sen. Richard Blumenthal, D-Conn., Thursday attended the first event held by the new Senate Consumer Caucus — a briefing to determine whether consumers should have more rights over their credit scores — then tackled another consumer issue, a proposed increase in fees charged by Fannie Mae and Freddie Mac.
The mortgage giants are prepared to “punish” Connecticut homebuyers next year by increasing the “guarantee fee” charged lenders to assume the risk a loan would default. This guarantee fee is usually passed along to homeowners.
Blumenthal said the increase is a result of Connecticut’s judicial mediation program and other judicial safeguards to protect homeowners from unnecessary or illegal foreclosures.
“I will fight to stop Fannie and Freddie from punishing Connecticut for protecting its citizens from unfair and abusive foreclosure practices. I am seeking immediate action to reverse this misguided, unacceptable decision,” Blumenthal said.
The “immediate action” the senator is speaking about is his protest to the Federal Housing Finance Agency that controls Fannie Mae and Freddie Mac. FHFA could respond to Blumenthal’s protests, but it has the authority to raise the guarantee fee.
In addition to Connecticut, homebuyers in New York, New Jersey, Florida and Illinois will face higher fees starting in 2013.