Important Loan Cost Information Upcoming!

Mitchell MilatLoan Officer Augusta Financial Mortgage Phone: 661-810-3362 Fax: 661-260-2252 License: nmls#253456 dre# 00979304 mitch@mitchforloans.com www.MitchforLoans.com

Mortgage Rates and Fees likely to Rise Soon Due to Government Action :(

As part of the End of Year Budget Negotiations, the President, Senate, and Congress agreed to assess and increase fees charged by Fannie Mae and Freddie Mac to help raise funds to fund the Government.  You might remember that there was a fierce battle over increasing taxes on Millionaires or on those earning over $250k per yr, which did not pass.

The Government elected to raise funding instead by assessing new fees on mortgages backed by Fannie Mae and Freddie Mac which makes up over 90% of the Conventional Market.  Unfortunately, homebuyers and homeowners are going to pay extra very soon.  Please see below release from Wells Fargo, and consider moving up the timing of your transaction to avoid the incremental additional cost of up to 80 basis points, which would equal  $200k loan x .80% = $1,600 fee increase  (Points, etc):

Conforming and Non-conforming prices will change based on recent Congressional action, worsening pricing

Conforming and Non-conforming prices will change based on recent Congressional action. 

Specifically:

• Freddie Mac and Fannie Mae are increasing their Guarantee Fee (GFee) effective with April “settlements,” which will worsen pricing.
• In order for a loan to meet the April settlements, it must close by Feb. 29, 2012.
• The GFee increase will worsen prices by up to 80 bps depending on note rate.
• Wells Fargo Wholesale Lending is staggering the impacts of that increase by Rate Lock Period in an effort to offer lower rates to consumers in the market for as long as possible.

Below are the effective dates of the staggered plan:

• January 11 – GFee increase will impact 45- and 60-day pricing. You must begin calling Priceline for Rate Lock Extensions rather than extending online for Conventional Conforming loans (extensions will not be available online for Conventional Conforming loans).
• January 31 – GFee increase will impact 30-day pricing.
• February 13 – GFee increase will impact 15-day pricing.