On August 1, the Federal Housing Finance Agency (FHFA) will drop the Adverse Market Refinance Fee put in place by Fannie Mae and Freddie Mac. Prior to this change, mortgage lenders had to pay the government sponsored enterprises (GSEs) a fee of 50 basis points when completing a mortgage refinance. FHFA began charging this fee on most refinanced mortgages in 2020 when costs and risks to the agency increased because of COVID-19. This fee became controversial as critics said the policy was a way for GSEs to profit during the refinance boom.
Experts expect this change to positively impact mortgage rates and allow more families to take advantage of the current low-rate environment by refinancing. Speaking about the policy adjustment, FHFA Acting Director Sandra Thompson said, “Today’s action furthers FHFA’s priority of supporting affordable housing while simultaneously protecting the safety and soundness of the Enterprises.”
Click here to learn more about the elimination of the Adverse Market Refinance Fee.
Are you interested in learning more about mortgage refinances and if you could benefit from one? Call me today to learn more!