The Federal Home Loan Mortgage Corp. moved yesterday to prod mortgage lenders to refund financing overcharges paid by home buyers to assume existing low-interest loans.
Some 10 of the 6,000 lenders eligible to do business with the government-chartered corporation have already been identified, but there is concern that many more banks and savings institutions may have cheated homeowners out of substantial sums.
The corporation--known as Freddie Mac--which buys loans from these primary lenders, hastily called a press conference yesterday following press reports about persons being overcharged as much as $4,000. Although Freddie Mac's executive vice president, William R. Thomas Jr., said he did not think the practice was widespread, he urged home buyers--and in some cases sellers--who believe they were charged excessive assumption fees between November 1980 and July 1, 1983, to contact the financing institution to determine whether the loan was owned at the time by Freddie Mac.
If it was, Freddie Mac will assist in determining whether the charges were improper and a refund is justified. Freddie Mac is asking homeowners to call collect during business hours at (202) 789-2200 for information and a questionnaire.
Among the companies in this area that have made refunds following complaints and Freddie Mac investigations are Standard Federal Savings and Loan, First Federal Savings and Loan of Annapolis, B. F. Saul Co., and Cameron Brown Co.
Officials said the action is aimed at preventing abuses in transactions in the 10 Western states that will permit mortgage assumptions until 1985. Elsewhere, Freddie Mac no longer permits loans it owns to be assumed.
In November 1980, Freddie Mac changed its policy of permitting lenders to charge a 1 percent mortgage assumption fee to one of allowing "reasonable costs." Earlier this year, that language was changed to "reasonable processing costs." The difficulty comes in determining what is reasonable.
In December 1982, The Washington Post reported that real estate agents, as well as home sellers and buyers, in the metropolitan area were complaining that lenders were charging two or three points up front to transfer a mortgage loan from one borrower to another. (A point equals 1 percent of the loan amount.) One savings and loan association planned to charge five points until Freddie Mac stepped in.
At the time, a Freddie Mac spokeswoman said that "a 2 1/2- to 3-point fee would be within the range that Freddie Mac feels is reasonable." Kenneth Thygerson, Freddie Mac's president, added that the corporation wanted to hear about any exorbitant fees charged by lenders on loans owned by Freddie Mac in order to put an end to them.
At yesterday's press conference, Thomas acknowledged that Freddie Mac had known about overcharges since 1981, but had done nothing because it thought the reported overcharges were isolated cases. He said he thought most overcharges resulted from misunderstandings on the part of the lender, but conceded that other lenders might be padding their profits by charging the same origination fees on assumed loans as on new loans.
Freddie Mac's policy is that lenders, who are paid a servicing fee of 3/8 of 1 percent, should not also profit on loans sold to Freddie Mac because the lenders' capital is no longer at risk.
Thomas declined to state yesterday what fees Freddie Mac considers "reasonable," saying that mortgage processing costs vary by institution. Each alleged overcharge will be determined on a case-by-case basis, he said.
Freddie Mac officials said all the lenders challenged so far have willingly agreed to make refunds.