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Chart showing new mortgage LLPA effective May 1st

4,781 Views | 43 Replies | Last: 11 mo ago by Diggity
Braxton.Sherrill
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9:37a, 1/23/23
AG
Here a good chart showing the new pricing adjustments that will be effective May 1st.

So if you have a 750 score and put 15 to 19.9% down the LLPAs are .75 worse. If you have a 630 and are putting less than 5% down you pricing would be 1.75 better.

Makes complete sense………

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Red Pear Realty
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10:51a, 1/23/23
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That chart kind of looks like the government sticking it to the middle class one more time.
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Furlock Bones
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In reply to Red Pear Realty • 4:41p, 1/23/23
AG
as they always do
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RockOn
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3:03p, 1/24/23
For reference:

Old: https://singlefamily.fanniemae.com/media/33201/display

New: https://singlefamily.fanniemae.com/media/9391/display

It appears that 780 is the new 740 in terms of top credit quality.
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RockOn
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3:14p, 1/24/23
Still not sure why the OP's chart has increases as negative numbers.
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Red Pear Realty
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In reply to RockOn • 3:50p, 1/24/23
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Probably bc the government made that chart
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RockOn
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In reply to Red Pear Realty • 4:15p, 1/24/23
Red Pear Realty said:
Probably bc the government made that chart
Can't really tell, its hosted on an S3 bucket and looks like a copy/paste from excel.
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SteveBott
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4:50p, 1/24/23
AG
That chart in the OP is from an article posted by Mortgage News and they added the color and pricing differences. Here is a complete list of all LLPAs. Note these fees are cumulative.

So a 750 credit+cash out+80LTV+45% DTI = total charge.

I come up with 2.375+.375=2.75 fee.

https://singlefamily.fanniemae.com/media/9391/display

This same loan before 5-1 cost is .875. So a very significant increase in that loan. It looks like they are rewarding lower credit and penalizes higher scores. Sucks
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JobSecurity
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9:02a, 1/25/23
AG
Can an expert explain this like I'm 5? or maybe 15

Is the change here in addition to the base market "going rate" for a complying mortgage?

So just making an example up if I have a 780 credit score and put 10% down thats a 0.25 charge, plus maybe DTI >40 is 0.375, you're looking at a .625% higher rate?


From looking at the chart Steve linked I don't get why someone with a 780 credit score putting <5% down would be charged less than if they put 20-24.99% down.
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Jay@AgsReward.com
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In reply to JobSecurity • 9:14a, 1/25/23
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The chart above is the CHANGE from current numbers. Not the actual fee. So, a 639 credit score is still charged more then a 780 at any loan to value. With 5% down for example, there is a .250 charge with a 780 credit score and a 1.750% charge for 639.

Here are the actual numbers: Fannie Mae LLPA


Also, it is important to understand this is the charge for a lender to deliver a loan to Fannie/Freddie. The "charge" is NOT to the rate. In other words, if the change is 1.250 on the chart in the first post it does NOT mean your rate will be 1.250% higher. It more likely that the rate would cost you 1.250% more in costs, or maybe .250% higher in rate. So, it will still increase costs, but not a direct 1 to 1 relationship.

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Jay@AgsReward.com
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In reply to Jay@AgsReward.com • 9:18a, 1/25/23
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Quote:
From looking at the chart Steve linked I don't get why someone with a 780 credit score putting <5% down would be charged less than if they put 20-24.99% down.
Because anything above 80% has mortgage insurance which insures the lender on default. Same reason you will notice the charge is a little smaller at 95% then at 85%. That is because the mortgage insurance coverage is greater at 95% then it is at 85%.
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jja79
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12:59p, 1/25/23
AG
I'm at a meeting today related to this. Part of the slant toward lower credit scores is to meet the administration's priority to serve under served communities. Read that how you will.

Effective for loans delivered to the agencies 5/1 so pricing before that will be impacted.
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SteveBott
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1:17p, 1/25/23
AG
I would expect lenders to start new pricing by March.
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SMG
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1:51p, 4/20/23
AG
Any updates to this?
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SMG
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1:53p, 4/20/23
AG
IF you put 60% down, with a good credit score, are you safe? Im a bit confused here.
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5 Star Bag man
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In reply to SMG • 2:41p, 4/20/23
AG
Yes. This is primarily only negatively affecting the good credit borrowers wanting to put down 15-20%.
If you put down 60% (as long as loan amount isn't above $726,000 which would make it jumbo), then you're in a great spot.
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12thAngryMan
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3:11p, 4/20/23
AG
If it's all the same to the borrower, would it be more advantageous to close at >=90% LTV, then pay down to 80% LTV to avoid PMI? Or are there other non-LLPA costs that would offset any potential benefit (assuming PMI is not paid for any significant length of time)?
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SteveBott
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In reply to 12thAngryMan • 3:36p, 4/20/23
AG
There is usually a prepayment clause on PMI so you would want to get that from the lender and calculate best option.
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Furlock Bones
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In reply to SteveBott • 4:47p, 4/20/23
AG
Yep. Damned if you do. Damned if you don't.
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12thMan9
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In reply to Furlock Bones • 5:01p, 4/20/23
AG
Furlock Bones said:
Yep. Damned if you do. Damned if you don't.
Also called BOHICA. Extra for the lube......
Ronnie '88
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SMG
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5:01p, 4/21/23
AG
Am I reading this chart right?

If I put down 30% or more, I am safe? No extra fee?

But if I put 29% down or less….then I will have a fee?
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hph6203
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In reply to SMG • 1:20a, 4/23/23
AG
Yes.
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Sea Speed
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4:05a, 4/23/23
AG
I close on my new house may 1st
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htxag09
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In reply to Sea Speed • 8:09a, 4/23/23
AG
This would have effected you if you closed April 30….. this is already in effect based on the lenders I've talked to
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Sea Speed
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In reply to htxag09 • 8:20a, 4/23/23
AG
Yea I see that as well but it says funded may 1 or later or something like that. Csnt do anything about it now so whatever.
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Jay@AgsReward.com
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In reply to Sea Speed • 10:08a, 4/23/23
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It would effect any deal that was locked in early March or later. The May 1st is the date the loan is delivered to the GSE's.

Here is good article about the whole thing: https://www.mortgagenewsdaily.com/markets/mortgage-rates-04212023
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hph6203
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In reply to Sea Speed • 10:21a, 4/23/23
AG
Delivered, not funded. It takes time post funding for a loan to be delivered and it takes time pre-funding to process loans, which would lead lenders to front run pricing changes and take any reduction in demand rather than eat the fee later.
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htxag09
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10:34a, 4/23/23
AG
I'll preface this by clarifying I'm not for it, but the hyperbole going around social media and the news is crazy. My FIL has tried to call me 3 times to tell me if we don't close before may 1 (on a house we aren't even under contract on) then we'll see an extra $25k in closing costs. I told him I've talked to my mortgage provider and that's not the case. He called again saying I need a new mortgage company because he saw it again on the news and that's absolutely the case.
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Sea Speed
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10:37a, 4/23/23
AG
The more you learn the more you realize you don't know.
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Mumbo Jimbo
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3:29p, 4/23/23
More reasons not to move, prices going up (again)
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Diggity
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In reply to htxag09 • 3:43p, 4/23/23
AG
That's funny. It's certainly become a huge talking point.

Glad to hear you finally found something.
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htxag09
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In reply to Diggity • 3:45p, 4/23/23
AG
Maybe…..
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bullard21k
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5:28p, 4/23/23
AG
Probably a silly question as I haven't looked into this at all but Would this have any impact if someone was looking to finance buying a piece of land with no home currently on it?
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5 Star Bag man
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In reply to bullard21k • 7:13p, 4/23/23
AG
Only affects your loan if you are looking to do a long-term fixed-rate, government backed product
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MookieBlaylock
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In reply to 5 Star Bag man • 8:12p, 4/23/23
AG
SpencAg said:
Only affects your loan if you are looking to do a long-term fixed-rate, government backed product


So 95% of primary home buyers
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