Freddie Mac and Fannie Mae will be holding off for a couple of months on implementing the new .5% tax on refinances. The “Adverse Market Fee” was going to begin on September 1. Now it’ll be December 1.
The tax was announced by the FHFA without any warning two weeks ago, and broadsided the mortgage industry.
After it was announced, the refinance fee faced immediate criticism from lenders, consumer advocates and lawmakers. A group of 20 trade organizations and public interest groups called on the FHFA to reverse the fee, arguing that it conflicted with the White House’s actions encouraging support of homeowners. The group included the American Bankers Association, the Credit Union National Association, the Mortgage Bankers Association, the National Association of Realtors, the Center for Responsible Lending and the National Fair Housing Alliance.
The FHFA finally gave a reason for the fee. The proceeds from the fee will be used to cover $6 billion in projected losses across Fannie and Freddie. Those losses include an estimated $4 billion in loan losses due to projected forbearance defaults, $1 billion in foreclosure moratorium losses, and $1 billion in servicer compensation.
Without the fee in place, rates should be a little better for homeowners that can get a refinance funded by the end of November.
Purchase loans and non-Conforming loans, loans with balances below $125,000 are exempt from the extra fee, as are loans made through Fannie Mae’s HomeReady and Freddie Mac’s Home Possible affordable refinance programs, which are aimed at low-income Americans and first-time homeowners.
Call me if interested in evaluating refinancing options
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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