A bit less in fees seen as helping affordability
Along with touting the success of homeowner protections, the FHFA said killing the extra fee can help with the growing affordability problem in a market where house prices are routinely hitting record highs.
"The COVID-19 pandemic financially exacerbated America's affordable housing crisis. Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money," Acting Director Sandra L. Thompson said in the agency’s announcement on Friday.
"Today's action furthers FHFA's priority of supporting affordable housing while simultaneously protecting the safety and soundness of the enterprises."
The Millionacres bottom line
"Santa Claus has come early for homeowners looking to refinance their mortgages," Greg McBride, chief financial analyst for Bankrate.com, told CNBC. "The fee had often resulted in an increase of one-eighth percentage point in rate, which was enough to siphon $20 per month in potential savings out of the pockets of borrowers with a $300,000 loan."
That holds true, of course, for real estate investors refinancing loans not just for their own homes but for rental properties and flips. Putting a little back at the top, instead of having it taken off, can only help.
That said, here’s a key line in the FHFA announcement: "FHFA's expectation is that those lenders who were charging borrowers the fee will pass cost savings back to borrowers."
That kind of promise is often famous last words. But as competitive as the housing market is for borrowers and lenders alike, this time that passing along of savings -- especially since it means merely not adding a fee lenders didn’t get to keep anyway -- is likely to happen.