MND Q&A

Why are rate hikes HIGHER than proposed FHFA Fee?

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Am basing this question on Rob Chrisman’s helpful Mortgage Tax Updates piece. FHFA is proposing a 10 BPS fee on new mortgages. Yet the banks are talking 40 to 50 BPS hikes – and that’s just on locks. Are the banks using the opportunity to boost profits and scapegoat the new tax, or is there something I’m missing in the new law?


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the 10bps was an increase in RATE which equates to a 40-50 bps increase in PRICE. but banks/lenders will take the mark up to their favor to be more profitable as any business would

Answered 4 months ago
Ken Crute
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Yes, rates have gone up slightly, but bear in mind that the market moves according to daily mortgage backed security prices, and in response to lender processing capacity and production goals. Agree that lenders may also pad the bottom line when the opportunity presents itself.

Answered 4 months ago
Ted Rood ✎
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