For the first time since 2009, Fannie Mae and Freddie Mac are raising risk fees charged to lenders on loans they buy for resale to investors.  Fannie and Freddie also are adding risk fees to more loans offered to borrowers with exemplary credit.  Although lenders could absorb the cost, most are expected to add the fees to loan costs.

MAKING SENSE OF THE STORY

• To avoid a fee or to receive a discount, most borrowers will need FICO scores of 740 or better and down payments of at least 25 percent.
• The fee increases likely will affect most loans with terms longer than 15 years that are sent to Freddie beginning March 1, and to Fannie beginning April 1.
• The most notable aspect of the fee increase is that the fees are being added to more loans to borrowers with higher credit scores.  With few exceptions, risk fees previously hadn’t applied to borrowers with FICO scores of 740 or higher.

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