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  • Comment Detail

  • Date: 05/29/15
    First Name: Adam
    Last Name: Reilly
    Organization: Centek Capital
    City: N/A
    State: N/A
    Attachment: N/A
    Number: 2015-N-03

  • Comment

    I didn't see another place to comment on the FHFA fee changes coming down the pipeline for September 1st. Some of the changes are...egregious. Lenders are already rolling out these fees. The most baffling is that there's now a hit for subordinate financing regardless of LTV? We have a borrower whose TLTV is 40%. Pricing is now .625% worse (Losing the .25% LTV incentive+another .375% just for having subordinate financing). We have another borrower whose pricing literally got a whole 1 worse (subordinate financing, cash out AND ltv).

    The adverse market effect was 0.25. If G-fees were fair overall before, but a bunch of our borrowers are getting pricing .625 worse and literally no one's pricing is getting before, it implies that you are just increasing g-fees. I know that previous fees were delayed before. BTW, since the FHFA has gone on record saying they want to try to expand homeownership, is this not antithetical? A lot of rates will go up because of this, meaning home buyers will qualify for less.

    On the note of the item I'm actually submitting to, if you want more money, remove the false $625,500 cap. In this area, $625,500 doesn't even come close to covering median. If everything is supposed to be equal, that cap should be removed. Then charge an extra g-fees for loans over $625,500 (for 1 unit of course). A half a point in g-fees would go a long way, and would alleviate the need for massively changing the pricing for everyone else. Additionally, it's definitely the fairest thing. Essentially, high cost of living areas are helping subsidize low cost of living areas (but we already do that with higher taxes).