Those are horrendous fees!  What on earth are we in for!  Thanks for the info.

Ed,

Can these costs be included in financing?  Or, does the buyer have to put more money down?  This could actually help reduce the number of foreclosures, which is good.  It will also mean the market for lower priced homes will see more activity, which is also good.  Thanks for the update!

seeing that most people doing freddie and fannie products need more than 70% and usually have new or mediocre credit, this is just going to hurt the borrowers....

it will push more people to FHA but that's not always the best program for them...

2%... that's crap

The new Indicator Score/Loan-to-value delivery fee will not apply to the following Mortgages:

􀂄 15-year fixed-rate Mortgages

􀂄 Home Possible Mortgages

􀂄 Section 184 Native American Mortgages

􀂄 Assumable Section 502 Guaranteed Rural Housing Mortgages sold with recourse

􀂄 FHA/VA Mortgages

􀂄 A-minus Mortgages, which are Mortgages that meet the requirements described in Guide Chapter C33, other Caution Mortgages, and Non-Loan Prospector^{® Mortgages that are subject to the CS/LTV (A-minus) fees, as set forth on Exhibit 19}

Guys, this is all I know for now. I will be following this as closely as I can.

For now it appears this will not go into effect until March of 2008, but its coming.

Thank you David for posting th efew exceptions to this.. however, if you read the release notes, even some of these items excluded from these fees will see changes in costs.

The problem is poor returns and I bet you some of the PMI companies are pushing this too. They have taken a beating!

If the FHA program gets re-tooled properly, HUD may have the absolutely best product on the market!

2%   holy crap      sometimes if my debt load gets too big   my score drops below 620   with NO lates anywhere on my credit................    wow! - thanks for sparking me to write a new blog     what is a good credit score nowadays anyway?

Ed,

Are the numbers the same for both Fanne Mae and Freddie Mac? 

Thanks for the heads up.  Not sure that pushing even more potential buyers out of the pool is the absolute best solution they could have come up with to fix reduced profits and the present credit crunch, but hey, what do I know?

Trent,

I am not sure. I do know that this was Freddie's release. However, Fannie lost a ton of money this past quarter too, so I expect similar if not the same.

As far as lenders knowing what to do, don't hold your breath. You'd think they had thought out a plan for the defaults when they opened the floodgates to such risky loans. Obviously thinking that far ahead in this business is taboo.

Ed