Conforming Market Price Set to Worsen For All InvestorsJan 6 2012
On December 23rd, President Obama signed the Temporary Payroll Tax Cut Continuation Act of 2011. This new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae and Freddie Mac by no less than 10 basis points from the average guarantee fees charged by these companies in 2011 on single-family mortgage-backed securities.
The expected results are to impact a price worsening of about 40-45bps over the next several weeks (with longer term lock periods being affected first). These changes will affect the entire mortgage market, not exclusively Guaranteed Rate.
If you are a borrower on the fence, you should ask your loan officer to educate you about these changes and consider getting files in process so you can lock soon (prior to the worsening taking effect across the board).
For more information, refer to the announcement from the Federal Housing Finance Authority and contact your loan officer for more information concerning your mortgage.