Fannie Mae, which will soon be fooled by Freddie Mac, has recently imposed an extra 0.25% upfront fee on every new mortgage that it purchases or guarantees.
Fannie Mae has said in a statement that the new fee is required to ensure that what the company charges is in alignment with the overall risk that they assume. The NAHP (National Association of Home Builders) has refers to the fee as a "broad tax on homeownership." Over 40% of all outstanding mortgages are owned by either Fannie Mae or Freddie Mac.
Currently, mortgage insurers have increased premiums for some borrowers and toughened standards. One example is PMI Group, Inc. has discontinued offering mortgage insurance to borrowers with credit scores which are under 620 and who are financing more than 95% of the value of their homes. Another company, Triad Guaranty Insurance Corporation has discontinued offering mortgage insurance on option ARMs. These mortgages tend to carry low introductory rates; however can lead to a rising loan balance.
Credit score requirements are getting tougher as well. 680, which was once considered "top tier" of credit scoring is now increased up to as high as 720, if borrowers wish to obtain the best rates.
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