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Conventional mortgage rates will jump in February; please read why
I have been in the mortgage industry for 21 years and have recently started chiming in on this Forum when it comes to residential mortgage questions.
I just received this from my wholesale conduit at Wells Fargo and wanted to share it as it will affect those in the process of or thinking about refinancing in the near future.What it essentially means is that rates will jump as high as .25% due to Fannie and Freddie are increasing their fees. While the fee increases take effect March 1 this will be seen sooner based on the rate lock period chosen.
Conforming and Non-conforming prices will change based on recent Congressional action, worsening pricing
Conforming and Non-conforming prices will change based on recent Congressional action.
Specifically:
• Freddie Mac and Fannie Mae are increasing their Guarantee Fee (GFee) effective with April “settlements,” which will worsen pricing.
• In order for a loan to meet the April settlements, it must close by Feb. 29, 2012
• The GFee increase will worsen prices by up to 80 bps depending on note rate.
• Wells Fargo Wholesale Lending is staggering the impacts of that increase by Rate Lock Period in an effort to offer lower rates to consumers in the market for as long as possible.
Below are the effective dates of the staggered plan:
• January 11 – GFee increase will impact 45- and 60-day pricing. You must begin calling Priceline for Rate Lock Extensions rather than extending online for Conventional Conforming loans (extensions will not be available online for Conventional Conforming loans).
• January 31 – GFee increase will impact 30-day pricing.
• February 13 – GFee increase will impact 15-day pricing.
Important
Conventional loans locked prior to the dates above must fund by Feb. 29 – no standard extensions. If the loan extends, you will be charged 55 bps to cover the GFee plus normal extension fees.
Non-Conforming pricing is impacted since pricing is set as a spread to conforming base price. Non-conforming will be exempt from the must-close date of Feb. 29, 2012, and you will not have to call into Priceline to obtain an extension.
This will probably look very confusing to most, but you are welcome to contact me if you have any questions. I am licensed in 12 States and not looking to self promote. No matter where you are, if you have a question I will be happy to try and help with a straightforward and honest answer. I have saved a lot through SD over the years and happy to give back some valuable info to the community.
Save in 2012;
-Adam
I just received this from my wholesale conduit at Wells Fargo and wanted to share it as it will affect those in the process of or thinking about refinancing in the near future.What it essentially means is that rates will jump as high as .25% due to Fannie and Freddie are increasing their fees. While the fee increases take effect March 1 this will be seen sooner based on the rate lock period chosen.
Conforming and Non-conforming prices will change based on recent Congressional action, worsening pricing
Conforming and Non-conforming prices will change based on recent Congressional action.
Specifically:
• Freddie Mac and Fannie Mae are increasing their Guarantee Fee (GFee) effective with April “settlements,” which will worsen pricing.
• In order for a loan to meet the April settlements, it must close by Feb. 29, 2012
• The GFee increase will worsen prices by up to 80 bps depending on note rate.
• Wells Fargo Wholesale Lending is staggering the impacts of that increase by Rate Lock Period in an effort to offer lower rates to consumers in the market for as long as possible.
Below are the effective dates of the staggered plan:
• January 11 – GFee increase will impact 45- and 60-day pricing. You must begin calling Priceline for Rate Lock Extensions rather than extending online for Conventional Conforming loans (extensions will not be available online for Conventional Conforming loans).
• January 31 – GFee increase will impact 30-day pricing.
• February 13 – GFee increase will impact 15-day pricing.
Important
Conventional loans locked prior to the dates above must fund by Feb. 29 – no standard extensions. If the loan extends, you will be charged 55 bps to cover the GFee plus normal extension fees.
Non-Conforming pricing is impacted since pricing is set as a spread to conforming base price. Non-conforming will be exempt from the must-close date of Feb. 29, 2012, and you will not have to call into Priceline to obtain an extension.
This will probably look very confusing to most, but you are welcome to contact me if you have any questions. I am licensed in 12 States and not looking to self promote. No matter where you are, if you have a question I will be happy to try and help with a straightforward and honest answer. I have saved a lot through SD over the years and happy to give back some valuable info to the community.
Save in 2012;
-Adam
