Fannie Mae and Freddie Mac add 0.50% fee to ReFis
Fannie Mae and Freddie Mac instituted a new “Adverse Market Refinance Fee”. It adds a 50 basis point (0.5%) fee to most mortgage refinancings starting September 1, 2020. Industry group says new fees increase average cost of a refinanced mortgage by $ 1,400 .
The new fees apply to HomeReady and high-value loan-to-value refinances regardless of the cap that otherwise applies to those transactions, according to the lender’s letter. In addition, the price adjustment is in addition to any other price adjustment that otherwise applies to the particular transaction.
Boeksmit said it’s an additional cost that most mortgages can’t handle. “Requiring Fannie Mae and Freddie Mac to charge 0.5% on mortgage refinances they buy will raise interest rates for families trying to make ends meet in these tough times. This means that the average consumer will pay $ 1,400 more than they would have paid otherwise. Worse yet, the September 1 effective date means that thousands of borrowers who haven’t locked in their rates could face unanticipated cost increases just days after closing.
“The Fed Should Immediately Stop Buying Fannie and Freddie have issued Mortgage Backed Securities. Creating money that risks future inflation for all of us has been justified by keeping the markets functioning and putting pressure on the market. money in homeowners’ pockets. But not that. Refinancers who haven’t locked their rates and wake up this morning to see these charges should consider dropping their claims. This will only extend the break-even period. to recoup the costs of refinancing that deter homeowners from doing it in the first place.
“The FHFA should cancel this announcement and not be a barrier for homeowners who reduce their monthly mortgage payments.”