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Fannie Mae & Freddie Mac Adverse Market Refinance Fee:

09/03/2020

On August 12th Fannie Mae & Freddie Mac announced that they would be implementing a 0.5% fee on all cash-out and non-cash-out refinance transactions that would go into effect on September 1st.... Calling it an Adverse Market Fee due to projected COVID-Related losses and an uncertain Economic Market.

What this meant was that all Conventional refinance transaction would immediately become more expensive. Simply put, for every $100,000 you owe on your mortgage when refinancing your home, you would pay an additional $500 fee (0.5% of the amount being refinanced). When considering that the median home price during the second quarter of 2020 was $291,300, this fee would cost the average homeowner an additional $1,456 if looking to refinance (or a hirer interest rate of .125%-.25% should they chose to take a higher rate rather than pay the fee outright).

The decision to implement this fee was met with many questions and extreme frustration by the housing industry, congress, as well as consumers (especially when considering that the announcement came with no advanced warning, and because refinancing opportunity is and has been one of the few economic bright lights homeowners have had during the pandemic). The White House also weighed in to state that it had “serious concerns” following the announcement of the fee.

On Tuesday August 25th (thirteen days following Fannie and Freddie’s initial announcement), the FHFA directed Fannie & Freddie to postpone implementation of this fee for 90 days with a new effective date of December 1st. The announcement also came with additional adjustments in that refinanced loans below $125.000, as well as Fannie Mae’s Home Ready and Freddie Mac’s Home Possible programs would not be subject to the 0.5% fee.

This gives homeowners a short window of opportunity!

Keep in mind that this Adverse Market Fee will be applied to refinance loans delivered to Fannie or Freddie on or after December 1st, which means that transaction would need to be completed and delivered before that date. Homeowners would likely want to submit their loan application for refinance and lock in their interest rate no later than mid-October in order complete and close on their refinance in time to avoid this fee while at the same time take advantage of record low interest rates.

*Information intended for internal KM/KW use only.


Forbearance Update

06/02/2020

  • Forbearance Update - Lending standards remain tight as Forbearance numbers continue to rise. The pace of forbearance requests may appear to be slowing, however there are now more than 4.7 million homeowners in forbearance. This translates to over $1 trillion in unpaid principle payments. Servicers of mortgage loans in government-backed securities must continue to make advance principal and interest payments as well as property taxes & home owners insurance payments each month on behalf of the borrower. Based on today’s number of homeowners in forbearance, mortgage servicers of these loans need to advance approximately $3.6 billion in combined payments per month on behalf of these borrowers (which is the primary reason why we continue to see tighter lending standards).

Rate Flash

  • Rate Flash – Keller mortgage remains committed to offering aggressively low interest rates to maximize savings while also maintaining ALL ZeroPlus loan program advantages. There are many factors that go into determining available rates. Although not every client will qualify for the same rate, KM’s average fixed rate for the week of 5/25/20 through 5/31/20 held below 3.375%.

*Information intended for internal KM/KW use only.


Forbearance Update

05/14/2020

Forbearance Update


KM Drops Jumbo Rates

05/06/2020


Forbearance and Rates

5/04/2020


The latest, Mortgage Lending and Real Estate industry update:

4/21/2020

Forbearance. CARES Act. The SHIFT.


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