Quote:
Originally Posted by JustRalph
Then tell me how it’s done……
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These aren't fees.
What is happening is on the back-end of loan pricing Fannie and Freddie are flattening the curve spreads. When pricing was on the floor it wasn't much a issue but now the difference between a 700 and a 740 is waaaaaay too large.
Its a simple fact that when rates are 3% there is little room in the spread for pricing adjustments but when they're at 6.5-7% there is a ton. Its pricing out obviously qualified borrowers.
Biden will spin this as making it easier for people with smaller down payments and dinged credit to get loans. Meanwhile Republicans will call this a tax, fee, wealth distribution etc. Both are wrong its just flattening yield spreads through Fannie and Freddie.
People with sub 680's are rarely going through Conventional Mortgages as it is because underwriting has tightened up and rates on govie loans like FHA are stronger anyway. I actually struggle to get Freddie approvals on sub 680s... sub 660 and you can basically forget about it.
As far as the downpayment stuff here is a little secret. 20% down has always been the worst rate on the sheet. It's worse than 5, 10, 15, and 25% down. They're all better and have been since I've been in the industry.
Like I said we've already been operating with these rate changes on refinances since February.
These go live for purchase transactions on May 1st.
