InfoBytes Blog
FHFA delays implementation of new refinance fee
On August 25, FHFA announced that it will delay implementation of Fannie Mae and Freddie Mac’s new adverse market refinance fee until December 1. As previously covered by InfoBytes, the adverse market refinance fee of 50 basis points, or 0.5 percent, was originally slated to apply to certain refinance mortgages with settlement dates on or after September 1. FHFA received significant pushback regarding the fee, including concerns about its expedited implementation period, and lack of information regarding the market conditions that would be addressed by the change (see InfoBytes coverage here). In the new announcement, FHFA states that the fee is “necessary to cover projected COVID-19 losses of at least $6 billion at the Enterprises,” noting that $6 billion is the “conservatively projected” cost of actions taken to protect renters and borrowers based on (i) “$4 billion in loan losses due to projected forbearance defaults”; (ii) “$1 billion in foreclosure moratorium losses”; and (iii) “$1 billion in servicer compensation and other forbearance expenses.”