Anyone refinancing their home? This will tick you off.

[cvgunman]

So I started to refi our existing loan. Get all the paperwork to the lender and then find out 2 days ago...well, read the article.

FHFA Drops a Bomb; Your Refi Just Got Much More Expensive!

In what can only be described as a cash grab, Fannie and Freddie's regulator just announced a new tax on refinances. Granted, it's not technically a tax, and it wasn't probably even intended to hit the pocketbooks of the American homeowner, but that's unfortunately exactly what it will do. Let's...

www.mortgagenewsdaily.com

Sent an email to said lender, and he's like "yep, gonna cost you more". Emailed him asked if he planned on notifying me, or was going to try to slip it by at closing without saying anything. Crickets!

 

[HKaltwasser]

Thanks for the "heads up".

 

[FireInTheWire]

We signed papers July 26th

 

[cvgunman]

Thanks for the "heads up".

Inform everyone you know. At te bottom of the article in the comments section is a phone number to the person in charge if the FHFA. Guarantee she'll be getting an earful from me.
Now I have to wait for said lender t o send me a schedule of fees and costs so I can see if a refi makes sense anymore. The jackal is actually trying to tell me to hurry and let him know to proceed or not.

 

[GWGriggs]

We looked at refi last month to get 1% lower interest and shorten the note by 4 year. When they told us it was going to cost $12.5K, we decided it wasn't worth the effort.

 

[cvgunman]

I'm looking at lowering rate 1.65% and dropping off 8 years (20 year @ 3%). Payment would only go up $35.00 a month. I'm just pissed about the new fee. Closing costs are supposed to be about $3500.00, and would go up with new fee. I still should probably do it, but this really chaps my ass! Actually, I'm more pissed that the weasel didn't call and let me know about this.

 

[HKaltwasser]

I hope this doesn't apply to conventional loans. We were about to refi too.

 

[Axxe55]

Glad you posted this. We were looking at doing a re-fi this year as well. Might not be the best option now.

 

[toddnjoyce]

We refinanced back in March, had we waited we could have gone down another 1/4ish point or so on interest.

 

[Fishkiller]

Looked at refi and decided it was economic foolishness, for us. Pay added money and end up with the same payment and same length as what is left on the original.

 

[cvgunman]

I hope this doesn't apply to conventional loans. We were about to refi too.

It does from what I can tell. Here are a couple of Fannie web pages to browse:

https://singlefamily.fanniemae.com/media/23726/display

https://singlefamily.fanniemae.com/media/9391/display

 

[cvgunman]

Glad you posted this. We were looking at doing a re-fi this year as well. Might not be the best option now.

I hear you. I decided to because after crunching the numbers, it will take 14 months to recoup the fees and then I'm saving 1.65% (as long as the rates don't go up before I lock it). My plan when we bought the house ws to make extra principal payments and pay it down quick. Easier said than done
Crunch the numbers and see if it will benefit at all. A $200,000 loan at 5% for 30 years will end up costing about $360,000 in the end ($160,000 interest).

 

[billtool]

If you have a VA loan and bullet credit, you can refi with zero costs. To 2.25%.

 

[LeadChucker]

I for one would like to see a detailed explanation as to why this increase was necessary. After growing rich inflating the property bubble and engaging in the predatory practices and peddling large quantities of high-risk subprime mortgages. we are supposed to treat them as respectable lenders? Now that rates have declined to a point where it is beneficial to the everyday man to refinance, they decide now is the time to increase their profits?

 

[Axxe55]

I hear you. I decided to because after crunching the numbers, it will take 14 months to recoup the fees and then I'm saving 1.65% (as long as the rates don't go up before I lock it). My plan when we bought the house ws to make extra principal payments and pay it down quick. Easier said than done
Crunch the numbers and see if it will benefit at all. A $200,000 loan at 5% for 30 years will end up costing about $360,000 in the end ($160,000 interest).

I had some other things going on that I put off doing the re-fi a couple of years ago, because of some other things that were much more of a priority. Bow that you posted that article, I'm getting sort of hesitant in even considering it now. We are 16 years into our 30 year mortgage, and locked in at 6.15% when when we closed on the house back then. IIRC, our pay-off amount is about $105K.

 

[mp_tx]

If you have a VA loan and bullet credit, you can refi with zero costs. To 2.25%.

How? I was quoted 2.75 percent. Sent you a PM.


Sent from my iPad using Tapatalk

 

[billtool]

How? I was quoted 2.75 percent. Sent you a PM.


Sent from my iPad using Tapatalk

Sent you a pm

 

[cvgunman]

I had some other things going on that I put off doing the re-fi a couple of years ago, because of some other things that were much more of a priority. Bow that you posted that article, I'm getting sort of hesitant in even considering it now. We are 16 years into our 30 year mortgage, and locked in at 6.15% when when we closed on the house back then. IIRC, our pay-off amount is about $105K.

Get an amortization schedule on your loan from lender. You are pretty far along and have paid most of the interest I'm sure, but it will let you know how much interest is still left. Compare that to a 15 year loan at current rate and see what comes out better.

 

[TX OMFS]

Buddy of mine is a mortgage banker. Posted this:

If anyone out there believes the government can solve any of your problems, go do some reading on what Fannie Mae & Freddie Mac did to mortgage banks last night. Let me give it to you in a nutshell. Last night after close of business they distributed a Lender Letter which instituted a new loan level price adjustment on all refinances due to adverse market conditions. In plain language, they are saying rates have gotten so low they need to make some extra cash to cover themselves to offset their risk.
In some ways that is sound logic. Here is where they screwed up, they made this change on loans delivered to Fannie/Freddie on September 1st or later. To put this in perspective, I typically lock a loan for 30 days and due to high volume right now we are locking loans for 45 or 60 days because of slower turn times for appraisals, title work, processing, etc. So, loans we have locked in the last few days with an investor will not be delivered to the investor for about a month or two. Then it takes them some time to pool and sell their loans to Fannie or Freddie. The investor has already committed to a price to us and now finds out they will be charged .5% of the loan amount when it is delivered that they did not know about 18 hours ago. So, on a $300,000 loan they just lost $1500.
Let’s do the math, if I am investor and I have 5000 refinances locked across the country right now with an average loan amount of $250,000, I took a hit of $6.25 million while I slept last night. So, while the fed is driving rates down to bolster the mortgage industry and provide relief in the form of lower mortgage rates, Fannie & Freddie pull this. Obviously, the right hand not only doesn’t know what the left hand is doing, they clearly don’t even understand what the left hand is doing. To quote the late, great Ronald Reagan, "The nine most terrifying words in the English language are, 'I'm from the Government, and I'm here to help.'"

 

[cvgunman]

Buddy of mine is a mortgage banker. Posted this:

If anyone out there believes the government can solve any of your problems, go do some reading on what Fannie Mae & Freddie Mac did to mortgage banks last night. Let me give it to you in a nutshell. Last night after close of business they distributed a Lender Letter which instituted a new loan level price adjustment on all refinances due to adverse market conditions. In plain language, they are saying rates have gotten so low they need to make some extra cash to cover themselves to offset their risk.
In some ways that is sound logic. Here is where they screwed up, they made this change on loans delivered to Fannie/Freddie on September 1st or later. To put this in perspective, I typically lock a loan for 30 days and due to high volume right now we are locking loans for 45 or 60 days because of slower turn times for appraisals, title work, processing, etc. So, loans we have locked in the last few days with an investor will not be delivered to the investor for about a month or two. Then it takes them some time to pool and sell their loans to Fannie or Freddie. The investor has already committed to a price to us and now finds out they will be charged .5% of the loan amount when it is delivered that they did not know about 18 hours ago. So, on a $300,000 loan they just lost $1500.
Let’s do the math, if I am investor and I have 5000 refinances locked across the country right now with an average loan amount of $250,000, I took a hit of $6.25 million while I slept last night. So, while the fed is driving rates down to bolster the mortgage industry and provide relief in the form of lower mortgage rates, Fannie & Freddie pull this. Obviously, the right hand not only doesn’t know what the left hand is doing, they clearly don’t even understand what the left hand is doing. To quote the late, great Ronald Reagan, "The nine most terrifying words in the English language are, 'I'm from the Government, and I'm here to help.'"

Yep, happened on Wednesday. This will force a lot of lenders to go out of business. From what I read, if customer locked before Wednesday, they are in the clear and the lender will eat it. Dirty trick Fanny pulled.