First Home Equity Loans

Fannie Mae and Freddie Mac have taken steps to reduce/remove a cost for those looking to refinance their homes.

A 50 basis points increase that was implemented during the pandemic to help offset some of the expected losses, was eliminated earlier this week.

Why was the refinance fee needed?

Fannie Mae and Freddie Mac are the industries largest buyers of all U.S. home loans, buying almost 2/3 of all loans.

FHFA who oversees Fannie and Freddie were anticipating and bracing for a housing crash because of the pandemic. But the complete opposite happened, not to mention housing prices and demand soared, while foreclosures have actually fallen to record lows.

Borrowers paid the fee indirectly as lenders boosted their rates as much as an eight of a percentage point, or about $20 on a $300,00 loan.

With rates still hovering at historic lows, the market is beginning to see a modest shift from being a sellers market to more of a buyers market. Inventory is beginning to build, as buyers have stepped back a bit, causing the average days on market to increase.