Experts say an “unprecedented” overhaul of mortgage fees would result in higher payments for most buyers.
Under the new rules, high-credit buyers with scores ranging from 680 to above 780 will see a spike in their mortgage costs – with applicants who place 15% to 20% down payment experiencing the biggest increase in fees.
When absorbed into a long-term mortgage rate, the increase is the equivalent of slightly less than a quarter percentage point in mortgage rate. On a $400,000 loan with a 6% mortgage rate, that buyer could expect their monthly payment to rise by about $40, according to calculations by Stevens. The revamped pricing matrix also includes the controversial addition of a new charge for buyers with debt-to-income ratios above 40% — a convoluted measure that drew immediate pushback from the Mortgage Bankers Association and other industry groups who warned it would be difficult to implement.
“The timing of this is troubling,” Pete Mills, senior vice president of residential policy at the MBA, told The Post. “As we start to hit the spring home buying season, home purchases are demonstrably impacted by the rate increases over the past year. The timing of this is not ideal.” “The latest recalibration to the pricing framework that FHFA announced in January 2023 is minimal, by comparison, and maintains market stability,” the FHFA official said in a statement.Fannie and Freddie are government-backed entities that buy up loans from mortgage lenders and either hold them as assets or resell them as mortgage-backed securities. Both have been in federal conservatorship since the housing market imploded during the Great Recession.
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