Fannie Mae: The Hits to Rate Keep Coming

Fannie Mae has announced new "hits to rate" that will take place on mortgages they purchase effective April 1, 2009.  This means that lenders will start to implement these increases ANY TIME since loans originated today may be bought by Fannie around the effective date for the new increased pricing.  No lender wants to be an April Fool and in position of having to make up for the difference in price when the loan is sold. 

Below is an example of some of the hits to pricing rates.  You can see why Mortgage Professionals should not rattle off rate quotes without having detailed information of the borrower.  If a couple (or single borrower) has a low-mid credit score of 720-739 and they are putting 20% down (LTV 75.01-80%) they can pay 0.25% more in fee than a borrower with a 740+ mid score or the 0.25% will be factored into the interest rate (currently running about 0.125% to rate).

Agency Products 

	LTV	LTV	LTV	LTV	LTV	LTV	LTV
FICO	<=60%	60.01-70%	70.01-75%	75.01-80%	80.01-85%	85.01-95	>95%
>=740	+0.25	0.00	0.00	0.00	0.00	0.00	0.00
720-739	+0.25	0.00	0.00	-0.25	0.00	0.00	0.00
700-719	+0.25	-0.50	-0.50	-0.75	-0.50	-0.50	-0.50
680-699	0.00	-0.50	-1.00	-1.50	-1.00	-0.75	-0.50
660-679	0.00	-1.00	-2.00	-2.50	-2.25	-1.75	-1.25
640-659	-0.50	-1.25	-2.50	-3.00	-2.75	-2.25	-1.75
620-639	-0.50	-1.50	-3.00	-3.00	-3.00	-2.75	-2.50
<620	-0.50	-1.50	-3.00	-3.00	-3.00	-3.00	-3.00

Cash-Out Refinance

	LTV	LTV	LTV	LTV	LTV	LTV	LTV
FICO	<=60%	60.01-70%	70.01-75%	75.01-80%	80.01-85%	85.01-90%	>90%
>=740	0.00	-0.25	-0.25	-0.50	-0.625	-0.625	N/A
700-739	0.00	-0.625	-0.625	-0.75	-1.50	-1.00	N/A
680-699	0.00	-0.75	-0.75	-1.375	-2.50	-2.00	N/A
660-679	-0.25	-0.75	-0.75	-1.50	-2.50	-2.00	N/A
640-659	-0.25	-1.25	-1.25	-2.25	-3.00	-2.50	N/A
620-639	-0.25	-1.25	-1.25	-2.75	-3.00	-2.50	N/A
<620	-1.25	-2.25	-2.25	-2.75	-3.00	-3.00	N/A

Condominium and Cooperative Property Types

Here are the current (soon to be former) price adjustments from Fannie.