A Midwestern housing finance executive fears limiting Fannie Maeand Freddie Mac to buying only qualified mortgages may prevent somecredit unions from making mortgage loans to lower incomemembers.

TimMislansky, chief lending officer at the 248,000-member, $2.6billion Wright-Patt Credit Union in Dayton, Ohio, emphasized thatthe credit union and its wholly owned housing finance CUSO,myCUmortgage,had not yet finished reviewing all of the Consumer FinancialProtection Bureau's new mortgage regulations.

He said that qualified mortgages' cap on fees could wind up hurting lower-income members who areusually buying homes in poorer housing markets or buying smaller,less expensive homes in wealthier markets.

Earlier this week, Fannie Mae and Freddie Mac announced thatbeginning in January 2014, they would not purchase mortgageswhich have fees of greater than 3% of the loan amount.

“On a $200,000 plus loan, that's $6,000 and more,” Mislanskyobserved. “Obviously, there is not a problem coming in underthat. But on a $100,000 or less loan, that cap is $3,000 orless and that could be a limiting factor for some creditunions.”

Mislansky said that all the different things that are includedin the fee definition have floors to them, prices and costs thatcannot be driven lower, and that these prices and costs would makeit very difficult to keep a loan's total fees less than $3,000.

Last year, for example, he said that myCUmortgage, which hasabout 175 credit union clients around the country but primarily inthe Midwest, originated $1.5 billion in housing finance spreadacross 11,000 loans. Of those, Mislansky said, fully 40% were for$100,000 or less.

Mislansky said he expected that credit unions would probablystill make these loans, but then would likely have to put them intheir own portfolios rather than sell them, right at the time whenthe NCUA has become more concerned about the levels of interestrate risk credit unions might take on in their portfolios.

“I am confident that they didn't mean for this to be theoutcome, but nonetheless I am afraid it will become one of theunintended consequences,” Mislansky added.