The mortgage industry was recently thrown a curve when mortgage giants Fannie Mae and Freddie Mac announced they were adding a 0.5% fee on all refinancing loans. According to CNBC’s Diana Olick, in a period of record-low interest rates, Fannie & Freddie say the fee is necessary to mitigate potential risk form the Coronavirus pandemic and will be made effective on loans starting September 1, 2020. Understandably, the mortgage industry has strongly reacted as well as the Trump Administration, which said it too has serious concerns about the new fees. CNBC says the move was seen as a “slap in the face” of the one sector of the economy that has been thriving during the pandemic. Indeed…
“This announcement is bad for our nation’s homeowners and the nascent economic recovery,” wrote Bob Broeksmit, CEO of the Mortgage Bankers Association, in a statement. “Requiring Fannie Mae and Freddie Mac to charge a 0.5% fee on refinance mortgages they purchase will raise interest rates on families trying to make ends meet in these challenging times.”
Click here to read the full report on CNBC.com.
UPDATE 8/25: Adverse Market Refinance Fee Implementation Moved to December 1st
