As a follow up to Fannie Mae’s recent guideline changes, they will now be taking steps to make conventional loans more expensive across the board. A few years back, Fannie Mae instituted an aggressive round of Loan Level Pricing Adjustments (LLPA’s) and an Adverse Market Delivery Charge (AMDC) to add market risk into their loan pricing. AMDC’s apply to all loans and LLPA’s are based on a combination of credit score and Loan to Value. Here is a before and after picture of the pricing hits that will be effective April 1, 2011 These are not slight adjustments to the consumer’s interest rate. Most of them are additional hits to pricing of 0.25% or 0.5% to the cost of the loan (not the rate). While the adjustment to interest rate these pricing hits will translate into will vary based on market conditions, it’s a reasonable assumption to conclude that they will affect rates by at least 0.125% and in some cases 0.25%. It would appear that just when we thought that FHA loans were getting less attractive when compared to conventional loans, Fannie Mae has taken steps to increase the appeal of an FHA loan.
Charles Dailey - iLoan - NMLS ID# 79048 - CA DOC, MN DOC & WI DFI - 612.234.7283
The Home Buyers Scouting Report® is provided directly to the buyer by HBM II, a licensed national real estate brokerage service company, not to or through a lender. The FREE home finding service is provided directly to prospective homebuyers by HBM II and its real estate brokers, as part of their ordinary real estate brokerage services. HBM II, Inc. works cooperatively with other real estate agents across the United States in attempting to find ready, willing and able buyers for homes listed for sale. The role of the Preferred Loan Officer is to assist in determining a comfortable home price range for Home Buyers Marketing II, Inc. (HBM II) to use when it is searching for property listings within the buyer's search criteria.
