(Bloomberg) – Fannie Mae and Freddie Mac are planning to charge extra fees on most mortgage refinancing loans that could increase costs for borrowers trying to capitalize on historically low interest rates. an uncertain economy.
The mortgage lending giants, which have been under government control since 2008, announced plans late Wednesday, saying the new 0.5% fee is intended to mitigate their risk. before the Covid-19 pandemic. It will apply to most of the refinancing associated with companies.
Companies and their regulators, the Federal Housing Finance Authority, have been cautiously moving during the pandemic, when parts of the mortgage market temporarily stalled in March before recovering. slowly. FHFA director Mark Calabria, an appointment of President Donald Trump, has pushed for an end to US control over companies, a mission hampered by the pandemic and the following economic slowdown there.
Fannie and Freddie do not lend. They buy them from lenders, wrap them in securities and guarantee the principal and interest repayment to investors. Companies say the new fees will apply to the loans they buy starting next month, which means borrowers will see new costs almost immediately. The lender can bear some of the costs on his own instead of passing them on to the consumer.
An FHFA spokesperson said Fannie and Freddie had requested the change based on the expected damage related to their pandemic.
The Mortgage Banking Association, a commercial group for lenders, says the fee will increase the typical borrower’s costs by $ 1,400. MBA Chairman Bob Broeksmit said in a statement that the announcement “flew straight in the face of recent regulatory actions by the administration calling on federal agencies to take all measures within the government. to support struggling homeowners ”.
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