Quicken made news earlier in the year when it heavily promoted to loan brokers a 60-hour LPMI “sale” committing coverage for $100 million in originations.
Firms hoping that new guaranty fee and loan-level price adjustments promulgated by the Federal Housing Finance Agency might boost the jumbo MBS market were sorely disappointed when the final details were released by the agency late last week. One executive who works for a real estate investment trust that issues jumbos said it’s clear to him that Fannie Mae and Freddie Mac are continuing to “misprice” their g-fees. He would love...
The news that Fannie Mae and Freddie Mac won’t be changing their base guaranty fees and will no longer charge a 25 basis point “adverse market” fee hit late last week when the Federal Housing Finance Agency released its decision on the issue that many have speculated about for weeks.The adverse market fee was eliminated for all loans but loan-level pricing adjustments were raised for certain mortgages. The changes will become effective for all loans purchased by Fannie and Freddie beginning Sept. 1, 2015. The base guaranty fee announcement came as no surprise as most expected there wouldn’t be a change. “The FHFA finds no compelling economic reason to change the general level of fees,” the agency said.
The Federal Housing Finance Agency announced new changes to private mortgage insurer eligibility rules on April 17 and the GSEs said the revisions will play a role in helping to reduce the risk to taxpayers by making sure the MIs are financially and operationally strong. During the financial crisis, some MIs couldn’t fully pay their claims, resulting in losses to the GSEs and taxpayers. The FHFA hopes the revised requirements will help lessen the chances of falling back into the same boat should there be another crisis. United Guaranty, the highest-rated GSE-approved mortgage insurer, said PMIER revisions are “a critical and necessary step that will allow the entire mortgage insurance industry to move forward by incorporating lessons learned during the financial crisis.”