FHFA Eliminates Adverse Market Refinance Fee

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FHFA Eliminates Adverse Market Refinance Fee
Allows certain borrowers to save more money when refinancing
FOR IMMEDIATE RELEASE
7/16/2021
Washington, D.C. ? Today, to help families reduce their housing costs, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) will eliminate the Adverse Market Refinance Fee for loan deliveries effective August 1, 2021.

To allow families to save more money, lenders will no longer be required to pay the Enterprises a 50-basis point fee when they deliver refinanced mortgages. The fee was designed to cover losses projected as a result of the COVID-19 pandemic. The success of FHFA and the Enterprises' COVID-19 policies reduced the impact of the pandemic and were effective enough to warrant an early conclusion of the Adverse Market Refinance Fee. FHFA's expectation is that those lenders who were charging borrowers the fee will pass cost savings back to borrowers.

"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," said 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."

The vast majority of Enterprise borrowers have successfully exited COVID-19 forbearance. In April, approximately 2 percent of single-family mortgages guaranteed by the Enterprises remained in forbearance, down from a high of approximately 5 percent in May 2020. FHFA will continue to monitor the housing finance system, making policy adjustment in coordination with the Enterprises as necessary.

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That's great news but when the fee went into effect the "market" adjusted itself to offset the 0.5 increase. I'm curious if the market will go up to offset the removal of the 0.5 fee.
 
Thin margin operators (Owning/CashCall/etc) will either shed .125% in rate and blast advertise things, or they may hold back given that that extra 1/2 point now goes to keep them in business if they hold rates higher.

My .02c
 
Rates look amazing today. This certainly isn't going to help home prices for the next couple of months.
 
Angels_Baseball_2015 said:
Has this FHFA elimination really changed the rates much?

Created a pretty strong refinance window for most borrowers if they did not refinance about 6-12 months ago.
 
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