New ‘Adverse Market Fee’ to Impact Mortgage Refinancing

Houses Mortgage Refinancing

Throughout the COVID-19 pandemic, the mortgage industry is a facet of the economy that has done well. Record-low mortgage rates pushed the housing market on track to see $2 trillion dollars in refinances in 2020. This amount is second only to 2003, according to the Mortgage Bankers Association (MBA).

Adverse Market Fee

However, refinancing will likely cost homeowners more. Fannie Mae (FNMA) and Freddie Mac (FMCC) charged a new "adverse market fee" on refinanced mortgages beginning on Dec. 1.

Fannie and Freddie guarantee around half of the country's mortgages. Additionally, these enterprises do not give mortgages to borrowers. Instead, they buy them from lenders, which are repackaged for investors.

Lenders will feel the brunt of this new fee. They are required to pay an extra...

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