New Mortgage Refinancing fee delayed
The Federal Housing Finance Agency announced Tuesday it is postponing the date it will begin implementing its adverse market refinance fee to Dec. 1.
The FHFA directed Fannie Mae and Freddie Mac to delay the implementation date of their adverse market refinance fee after it was previously scheduled to take effect Sept. 1, 2020.
FHFA is also announcing that the enterprises will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower-income borrowers at or below 80% of area median income. Affordable refinance products Home Ready and Home Possible, are also exempt.
After Fannie Mae and Freddie Mac announced an added 50 basis point fee to all refinances, the housing industry was quick to react. In fact, the industry quickly turned against Fannie and Freddie’s added fee.
The Mortgage Bankers Association was one of the strongest voices in opposition to the new fee, saying, in part, “The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times. In addition, the September 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing.”
It also criticized the increase, saying that it would be particularly harmful to low- and moderate-income homeowners.
Market Analyst | Team Harborside | teamharborside.com
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