The Federal Housing Finance Agency announced Tuesday, Aug. 25, it is postponing the date it will begin implementing its adverse market refinance fee to Dec. 1. It was previously scheduled to take effect Sept. 1.
FHFA is also announcing that the enterprises will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower-income borrowers at or below 80% of area median income. Affordable refinance products Home Ready and Home Possible, are also exempt.
After Fannie Mae and Freddie Mac announced an added 50 basis point fee to all refinances, the housing industry responded negatively.
The Mortgage Bankers Association was one of the strongest voices in opposition to the new fee, saying, in part, “The additional 0.5% fee on Fannie Mae and Freddie Mac refinance mortgages will raise costs for families trying to make ends meet in these challenging times. In addition, the Sept. 1 effective date means that thousands of borrowers who did not lock in their rates could face unanticipated cost increases just days from closing.”
The LSCU and CUNA were active in supporting the implementation delay, which protects borrowers who already are suffering adverse financial effects during the pandemic.