The Federal Home Loan Mortgage Corp.’s seller-servicers will soon face higher delivery fees.
In Freddie Mac Bulletin No. 2010-30, the secondary lender said it is revising its post-settlement delivery fees.
On loans with loan-to-values in excess of 85 percent and credit scores less than 620, the new delivery fee will be 3.25 percent. A credit score above 740, however, would cut the new fee to just 0.25 percent. With the 620 score, the fee drops to 0.50 percent when the LTV is less than 60 percent — though this pricing hasn’t changed.
A loan with a score of at least 740 and an LTV below 60 percent will receive a negative fee of 0.25 percent — just as before.
Nearly 50 different combinations offer a range of pricing between the two extremes. (read bulletin)
In addition, loans with secondary financing will be hit with new fees.
If the credit score is less than 720, the LTV is less than 65 percent and the total LTV doesn’t exceed 95 percent, then the fee is 0.50 percent. With LTVs up to 80 percent and TLTVs less than 95 percent, the fee is 1.00 percent.
But when credit scores are at least 720 with LTVs of no more than 65 percent and TLTVs up to 95 percent, the fee is just 0.25 percent.
“These delivery fee changes address the current increased risk and costs associated with certain higher loan-to-value mortgages,” the secondary lender explained. “The changes help to ensure that we are adequately compensated for the continued provision of essential liquidity to the mortgage market, and are able to continue our support for affordable lending while being diligent stewards of taxpayer funding.”
The updated pricing impacts loans with settlement dates on or after March 1, 2011 — though Freddie said pricing to borrowers doesn’t necessarily need to change since sellers control this function. In any event, the McLean, Va.-based company expects only a nominal impact on consumer affordability.