Tuesday, January 10, 2012

Congress Mandated Conventional Guarantee Fee Increase to Pay for Payroll Tax

Got my first email notice tonight from a Lender about the upcoming Guarantee Funding fee that Congress is mandating to pay for that payroll tax mess. I announced a few weeks back to expect changes in your rates with this mandate. Well, they are telling me that it appears it is going to instantly raise your conventional loan rates by .5%. I cannot stress this enough, if you or any of your clients are looking to purchase or refinance and go conventional financing, you need to lock your loan soon. I have a feeling that Government backed loans like FHA will soon follow.

Here is more information on this bill.

The Federal Housing Finance Agency will increase guarantee fees on single-family mortgage-backed securities charged by the government-sponsored enterprises for loans delivered effective April 1, 2012, in response to the new funding mechanism for the payroll tax cut extension passed by Congress.
Passage of the payroll tax cut extension requires Fannie Mae and Freddie Mac to raise g-fees to cover this Payroll Tax Extension.
DeMarco said the FHFA will take "into consideration risk levels and conditions in financial markets" when the agency contemplates rates.
President Barack Obama signed the temporary two-month tax cut in December after House and Senate leaders reached a last-minute deal prior to the holiday break.
Link to the story about the Tax Cut Extension Deal

Please share this with others so that they are not caught unaware.

Feel free to contact me for a free consultation or good faith estimate.

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