A new report from FHFA confirms what small mortgage firms have long known: they can't catch much of break when it comes to Fannie Mae and Freddie Mac guaranty fees.
With the increase, the average g-fee for new loans will be in the range of 60 basis points. But there is some good news: FHFA said it would eliminate the up-front “adverse market” fee of 25 bps assessed on all but the four states “whose foreclosure carrying costs are more than two standard deviations greater than the national average.”
Borrowers with existing FHA-insured mortgages may continue to utilize the agency’s streamline refinance program regardless of their loan balance. The current cap of $271,050 for “low cost” areas will remain unchanged.
Lender-paid mortgage insurance has garnered renewed interest lately from mortgage lenders as an alternative to FHA-insured loans, whose increased costs have shut out many cash-strapped borrowers. David Williams, vice president of RightStart Mortgage in Pasadena, CA, said his firm has been getting a lot of requests from wholesale brokers for conventional conforming loans with LPMI because the FHA product has lost its competitive edge. With borrower-paid private MI, the homeowner pays a monthly ...
Brokers and the trade groups that represent them believe new regulations from the Consumer Financial Protection Bureau put them at a competitive advantage to lenders that actually fund mortgages.
“Our estimate of legal and rep and warrant reserves for the largest banks is a total of roughly $60 billion,” S&P writes in a new report. “We estimate that the largest banks may need to pay out an additional $55 billion to $105 billion to settle mortgage-related issues, some of which is already accounted for in these reserves.”
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