HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
MortgagePolitics & MoneyRegulatory

Broker group calls on FHFA to spike upcoming cash-out refi fee

Loan-level price adjustments for most cash-out refinances will increase by as much as 75 bps starting in February

The chorus of mortgage brokers who are calling on the Federal Housing Finance Agency (FHFA) to remove a targeted cash-out refinance fee is growing louder.

The National Association of Mortgage Brokers wants the housing regulator to consider removing the loan level pricing adjustments related to cash-out refinances, which can be up to 75 basis points when the pricing adjustments take effect on February 1, 2023.

Such a pricing increase “creates a disparate impact for current homeowners by negatively impacting pricing and payments,” the NAMB said in a statement last week.

The broker group has no issue with the FHFA eliminating upfront fees for first-time homebuyers earning less than 100% of area median income; borrowers using HomeReady and Home Possible; the HFA Advantage and HFA Preferred programs; and single-family loans supporting the Duty to Serve program.

The measure impacts mainly low-income borrowers and underserved communities, according to FHFA Director Sandra Thompson. The upfront cash-out refi fee was a tradeoff for the elimination of other fees as part of the regulator’s annual look at guarantee fees.

“NAMB understands these changes are a result of FHFA’s efforts to meet the objectives set forth in the 2022 Scorecard,” the group said. “However, the goal should be to support all borrowers, whether first-time homebuyers or long-time homeowners, thereby creating a level playing field for all.”


Today’s real estate technology stack – What do you really need?

This white paper will cover the essential tech solutions that agents, teams and brokerages need to survive, as well as identify the optimal tech solutions for gaining a competitive edge in any market.

Presented by: Chime


A 50 bps “adverse market fee,” which was tacked onto loans starting in late 2020 and ended in July 2021, significantly boosted Fannie and Freddie’s profitability last year, according to a recent report published by the FHFA. The GSEs purchased a record $2.52 trillion in single-family loans in 2021, with the average g-fee rising 2 bps to 56 bps.

Earlier this year, the FHFA increased upfront fees between 0.25% and 0.75% for high-balance loans, tiered by loan-to-value ratio, effective April 1, 2022. For second home loans, the upfront fees increased between 1.125% and 3.875%, also tiered by the loan-to-value ratio. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please