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During the pandemic last year the Federal Housing Finance Agency (FHFA) had imposed costly mortgage refinance fees, which it is eliminating.
The Adverse Market Refinance Fee cost 50 basis points, and the lenders were required to pay Fannie Mae and Freddie mac this amount for each such loan delivered.
Both the government-sponsored enterprises (GSEs) guarantee, packages, and sells mortgages under the FHFA umbrella.
The fee is equal to half a percentage point of the loan amount, it was introduced because of the loss the FHFA expected to incur due to the pandemic, which left millions of homeowners with no jobs.
But the predicted losses did not happen. Instead, the housing market began rising and as the economy began a recovery the jobless rates also fell.
Leading the FHFA to announce the expiry of its Adverse Market Refinance Fee requirement on Aug. 1.
Along with protecting the homeowner, the FHFA said by aborting the extra fee they will be able to help the growing affordability problem of the house prices.
America’s affordable housing crisis was worsened financially due to the pandemic.
Families can take advantage of the low-rate environment and save more money because of the elimination of the Adverse Market Refinance Fee said, Acting Director Sandra L. Thompson.
She added that with this action FHFA’s is supporting affordable housing and simultaneously protecting the safety and soundness of the enterprises.
Reference Source: MSN
