Print Page   |   Sign In   |   Become A Member
News & Press: News

Great News Refinancers: Costly New Fee Gets Pushed To December

Thursday, August 27, 2020   (0 Comments)
Share |

Great News Refinancers: Costly New Fee Gets Pushed To December

 

Published - Forbes - 8-25-2020

 

A new fee on mortgage refinances set to take effect Sept. 1 has been delayed. This is excellent news for homeowners looking to take advantage of historically low interest rates. 

 

The Federal Housing Finance Agency (FHFA) on Tuesday announced it will delay enforcing its “adverse market refinance fee” until Dec. 1. Additionally, borrowers with loan balances below $125,000 will be spared the fee, which could add thousands to the loan cost when implemented.

The adverse market refinance fee is a 0.5% charge that is expected to be added to all mortgage refinances sold to Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSE) that purchase about 70% of all home loans from lenders. Housing industry organizations roundly criticized the FHFA’s initial September implementation date, as homeowners continue to face job insecurity and a shaky economy amid the coronavirus.

The GSEs previously said the fee is necessary “as a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”

Still, critics have argued against the timing of the new fee. Refinancing has been the main driver in mortgage lending and a way for homeowners to decrease their monthly bills as rates have fallen to record-lows. The refinance share of mortgage applications is 64.6%, according to the latest data from the Mortgage Bankers Association (MBA).


Association Management Software Powered by YourMembership  ::  Legal