The Federal Housing Finance Agency (FHFA) has updated the loan fee structure of mortgages leading to cries of unfair fees imposed on borrowers with excellent credit scores to subsidize the ones with lower credit scores.
The FHFA revamped and adjusted the upfront fee matrices for purchase, rate-term refinance, and cash-out refinance loans to ensure that borrowers with lower income or net worth can still afford single-family homes.
The fees or costs refer to the Loan Level Price Adjustments (LLPAs) that Fannie Mae and Freddie Mac impose. These entities guarantee the majority of new mortgages.
The new pricing structure applies to all loans that Fannie Mae and Freddie Mac guarantee, no matter which lender provides the loan. This means that almost all loans, except for FHA, VA