ARLINGTON, Va. — The March 2008 Flash report from NAFCU noted the additional surcharges that Fannie Mae and Freddie Mac implemented on the mortgages of lower-rated borrowers (credit scores below 680) who put down less than a 30% down and have terms longer than 15 years.
All lenders will be charged an additional 2%, resulting in higher closing costs or interest rates. But a majority of those NAFCU members polled (58%) said they would not pass the origination charges on to their own members, while 43% said they would. But less than half of respondents (42%) will hold the loans instead of charging the higher rate to members. Come June, Fannie and Freddie will raise the threshold of lower-rated borrowers to a credit score of 720 or below and raise the maximum surcharge to 2.75% and charge more fees to borrowers who put down less than a 40% down payment.
The economic stimulus package signed into law recently by President Bush raised the limits of mortgages eligible for sale to Fannie and Freddie that they may turn into securities for sale to $729,750 from $417,000 (jumbo loans) in parts of the country where home values are very high. Of those CUs that offer jumbo mortgages, half said they could pass underwriting standards for conforming loans.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
- Exclusive discounts on ALM and CU Times events.
- Access to other award-winning ALM websites including Law.com and GlobeSt.com.
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
