(Bloomberg) – Fannie Mae and Freddie Mac plan to impose an additional fee on most mortgage lending loans that could increase costs for lenders trying to take advantage of historically low rates in an uncertain economy.
The mortgage giants, which have been under government control since 2008, announced the plan late Wednesday, saying the new 0.5% fee is intended to reduce their risk in light of the Covid-19 pandemic. It would apply to most refinances in which the companies are involved.
The companies and their regulator, the Federal Housing Finance Agency, have acted cautiously during the pandemic, as some parts of the mortgage market temporarily intervened in March before slowly recovering. FHFA Director Mark Calabria, a nominee for President Donald Trump, has called for an end to US corporate control, a task hampered by the pandemic and the subsequent economic downturn.
Fannie and Freddie do not make loans. They buy them from lenders, wrap them in securities and guarantee the return of principal and interest to investors. The companies said the new fee would apply to loans they purchase next month, which could mean lenders will see the new costs almost immediately. Lenders were able to cover some of the costs themselves instead of passing them on to consumers.
A FHFA spokeswoman said Fannie and Freddie requested the changes based on their projected pandemic-related loss.
The Association of Mortgage Bankers, a trading group for lenders, said the fee would increase the cost of the typical lender by $ 1400. the administration that encourages federal agencies to take all measures within their authorities to support warring homeowners. “
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