Fannie Mae Announces Increased Mortgage Rate Pricing Adjustments Effective Spring 2011

By
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

On December 23, 2010, Fannie Mae announced an increase to its mortgage pricing structure.  This new pricing is effective with mortgage loans with purchase and mortgage backed securities delivery dates after April 1, 2011.  You can expect to see all mortgage lenders implement these pricing changes in February or March in anticipation of the April 1st deadline. 

With this change, even 740+ borrowers will see the cost of their mortgage rates rise.  Currently, Fannie Mae views 740+ as the top tier and does not have any credit score pricing add-ons for those borrowers.  Those borrowers will soon see a .25% pricing hit for all LTV's above 75.01%. 

Even for 720-739 borrowers, an impact to the interest rate currently only occurs with a 75.01-80.00% LTV.  Soon, borrowers with 680-739 credit scores will see their costs rise by an additional .25% for LTV's of 70.01%-80.00%.  Borrowers with scores from 620-739 above 80.01% will see a .500% increase across the board from the current adjustments that are in effect today.

Borrowers below 680+ will not really be impacted since Fannie Mae loans above 80% LTV require mortgage insurance.  Currently most MI companies have at least a 680+ minimum credit score to be able to issue an MI policy for a mortgage approval.  

First mortgage loans origination where subordinate financing exists will see pricing add-ons as well.  Soon, all LTV's where subordinate financing exists will see an additional .25%-.75% pricing increase for CLTV's of 80.01%-95.00%.  

Fannie Mae typically only makes adjustments to account for increased risk within an area (i.e credit score, LTV, purpose, etc).  This can lead to speculation that the loans with the above criteria are still not performing as well as they should be.  It is important to note that these adjustments are all to the pricing of the loan and not directly to the interest rate itself.  The actual impact to a borrower's interest rate will change daily as pricing in the mortgage market moves.

 

 

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It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

 

Programs Include:

 

  • Conventional (Fannie Mae & Freddie Mac)

  • FHA, USDA, & VA

  • Jumbo to $3,000,000

  • Bank Statement Program for Self-Employed Borrowers

  • Foreign National Program

  • Investor Cash Flow

  • Non-Warrantable Condos

  • Renovation - FHA 203(k), Fannie Mae HomeStyle Renovation, & VA Renovation

 

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  • Rodney Mason is a Licensed Branch Manager located in Atlanta, GA.   He can be reached at (404) 591-2453.
  • Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including:
    Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

  •  
  • Providing financing for all cities across Florida including: Altamonte Springs, Atlantic Beach, Boca Raton, Bradenton, Cape Coral, Clearwater, Coral Springs, Daytona Beach, Delray Beach, Destin, Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Hollywood, Homestead, Jacksonville, Jupiter, Key Largo, Key West, Lake City, Largo, Marathon, Mexico Beach, Miami, Naples, New Smyra Beach, Ocala, Orlando, Palm Coast, Panama City Beach, Pensacola, Pompano Beach, Port St Joe, Sanibel Island, Sanford, Sarasota, St Augustine, St Petersburg, Tallahassee, Tampa, Vero Beach, West Palm Beach, & Winter Park, and many more.

 

  • Providing financing for all cities across South Carolina including: Aiken, Anderson, Beaufort, Bluffton, Charleston, Columbia, Conway, Edisto Island, Florence, Greenville, Hilton Head, Johns Island, Myrtle Beach, North Augusta, Orangeburg, Rock, Hill, Spartanburg, Sullivans Island, Summerville, and many more.  
  •   

    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more

 

All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.

    

           

Comments (5)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Great my 5 year arm readjusts in June. I was hoping for a good decrease . Now I am hoping to stay the same after reading this

Dec 27, 2010 03:26 AM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Charlie....If you just allowing your ARM to re-set, then none of the above applies to you.  The above is only for new originations, both purchase and refinance.  So long as the 6 month or 1 year LIBOR stays low, you will probably still adjust lower.  At least that is the trend I have seen so far. 

Dec 27, 2010 03:31 AM
Rob Ross
MVB Mortgage "A Potomac Mortgage Group Trademark" - Friendship Heights, DC
MVB Mortgage

Good information from one lender to another.  Thanks Charlie.....

We should share some info sometime for we are in non-competing markets.

 

Rob

Dec 27, 2010 03:34 AM
Larry Atkins
State Wide Realty Co. - Farmville, VA

Charlie, this is a very informative post....thanks for the heads up....even if it isn't the best news I've heard all day.

Dec 28, 2010 01:33 AM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Rob...Thanks for the comments.  The lending wold is ever changing. 

Larry.....Fannie and Freddie are always making changes to the offerings.

Dec 28, 2010 01:36 AM