It is nice to end the week with good news, so here it is: The Federal
Housing Finance Agency (FHFA) just announced it is
eliminating the Adverse Market Refinance Fee that the GSEs Fannie Mae and Freddie
Mac have been charging. The change becomes effective for loan deliveries on and
after August 1, 2021.

The 50-basis point fee was designed to cover losses
projected as a result of the COVID-19 pandemic. However, the agency says the
success of policies it and the GSEs put into effect in response to the crisis were
effective enough to warrant an early conclusion of the Fee. FHFA’s expectation
is that those lenders who were charging borrowers the fee will pass cost savings
back to them.

“The COVID-19 pandemic financially
exacerbated America’s affordable housing crisis. Eliminating the Adverse Market
Refinance Fee will help families take advantage of the low-rate environment to
save more money,
”┬ásaid Acting Director Sandra L. Thompson.
“Today’s action furthers FHFA’s priority of supporting affordable housing
while simultaneously protecting the safety and soundness of the
Enterprises.”

As weekly reports from both the Mortgage Bankers
Association (MBA) and Black Knight have shown, the number loans in forbearance have
been dropping steadily. The reduction has been most rapid among loans serviced
for the GSEs. FHFA said that there were approximately 2 percent of the GSEs’
loans in forbearance in April, down from a high of approximately 5 percent in
May of 2020.

MBA’s President and CEO Bob Broeksmit issued the
following statement following the FHFA announcement.

“MBA applauds Acting Director Sandra Thompson’s
decision to eliminate the Adverse Market Refinance Fee. We have called on FHFA
to rescind this policy and appreciate that they have reviewed the data and been
responsive to our request. With less than 2 percent of GSE loans in forbearance
and continued home price appreciation resulting in significant borrower equity,
there is no need for the fee.

By Jann Swanson , dated 2021-07-16 14:19:47

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Courtesy of Mortgage News Daily

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