To Help Borrowers, FHFA Eliminates Adverse Market Refinance Fee
In a move to ease costs for borrowers who refinance, the Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries effective Aug. 1, 2021.
The 50-point basis fee that lenders are required to pay Fannie Mae and Freddie Mac when they deliver refinanced mortgages was designed to cover losses projected as a result of the COVID-19 pandemic.
In a press release, FHFA said Fannie and Freddie’s successful COVID-19 policies “reduced the impact of the pandemic and were effective enough to warrant an early conclusion of the Adverse Market Refinance Fee. FHFA’s expectation is that those lenders who were charging borrowers the fee will pass cost savings back to borrowers.”
“The COVID-19 pandemic financially exacerbated America’s affordable housing crisis. Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money,” said Acting Director Sandra L. Thompson.
FHFA reports it will continue to monitor the housing finance system and make policy adjustment in coordination with Fannie Mae and Freddie Mac as necessary.