Unintended Consequences?


So, we know that guarantee fees for new Fannie and Freddie loans will be going up to pay for the two-month payroll tax cut. We also know that lenders will not pay these increased fees without passing them on to borrowers.  Therefore, you can expect to see rates increase over the next several weeks as lender roll out their strategies to cover these increased costs.

Our major investor informed us this week that the impact will probably result in increases of mortgage rates on average of .125% on a 30 year fixed rate mortgage.

Sumary from the Mortgage News Daily – Tax Cut Extension Now Officially Raising Mortgage Rates

Another perspective from Rob Chrisman –  Mortgage Borrowers To Fund Payroll Tax Cut

The bill also will raise the annual insurance premium borrowers pay on FHA loans by one-tenth of a percent, but the timing for the increase in the upfront mortgage insurance premium (UFMIP) has not been announced.


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