Fannie Mae & Freddie Mac affects Refinances

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,111
181
63
San Diego, California
www.loansreduced.com
Recently, Fannie Mae & Freddie Mac have put on a risk adjustment to all refinances being done. Does that mean they are expecting a possible reduction in value and preparing for a large number of defaults? That's just about the only thing that I can assume but at this time we don't know. We have learned from what has happened in 2008-2012 and can adopt some of those methods to keep people in their homes that are now lacking employment.

The loan level price adjustment mentioned above was .5% in price. That means that the interest rate was adjusted roughly between .125 - .25%, not that the interest rates just immediately jumped .5% overnight. I am still locking interest rates in the 2's even after the Fannie/Freddie overnight decision which has upset many, many people on all sides.

Will they remove the loan level price adjustment added for risk? That's the big question here, there's talk that they will be removing it within the month due to the amount of pushback they're receiving. We will see, but that could also affect interest rates to be even lower than what they are today.

If you're currently above 3.5% you can typically see a significant savings with a refinance, if you would like me to give you an idea of what we can offer I would be happy to help. Please feel free to either contact me on my direct number (619) 379-8999, our direct LoanSafe number of (800)779-4547 or by E-mail: [email protected]. Mention you're from LoanSafe and I can provide a $500.00 discount towards closing costs.

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,111
181
63
San Diego, California
www.loansreduced.com
Recent announcement from FNMA & FHLMC, they will not be assessing the risk based pricing adjustment until December! There was a lot of push back on all sides of the real estate community and it looks like they listened!