FHFA Postpones Increase for 90-Days

By Bill Dolan, CMB

Under great pressure from both lenders and industry trade associations, the FHFA has temporarily suspended the 50bp increase on refinances sold to Fannie Mae and Freddie Mac until December 1, 2020.This will allow lenders the capability to honor locks and reduce their pipelines before the LLPAs are increased once again.

Furthermore, all refi’s with a loan amount of $125,000.00 or less will be exempt from the .5% add-on fee effective December 1st and going forward.  

The bottom-line is that the GSEs see that mortgage bankers this year are just “kicking it” and they want in on the action. This will help both Fannie Mae and Freddie Mac shore up the additional capital needed to return to private ownership which Director Calabria from the FHFA has stated, “would not happen until end-of year at the earliest”.  

Some lenders are heavy with liquidity and are looking to purchase mortgage product for their balance sheet, while others wish to forego the additional fee and plan on placing the loans in their portfolios for the time being.

Now, may very well be the time for you to contact the SCA Mortgage Exchange and speak with our Advisory Group to discuss the best course of action and strategies needed for your balance sheet and in addressing your approach and concerns to the above.

To arrange a free consultation, please contact the SCA Mortgage Exchange at (617) 694-2617.