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Fannie Mae loans to get a bit more expensive in the spring

January 12, 2011

As if the recent volatility was not causing enough problems, Fannie Mae recently announced that they will apply Loan Level Price Adjustments to many loans that they purchase.  These adjustments will increase the overall cost of borrowing.  Surprisingly, these changes will affect the vast majority of loans, even for borrowers with credit scores in excess of 800.  I wish that I could say that the market would take these changes in stride, but with added costs ranging from 0.25% to 0.5%, I can only guess that this will make it more difficult for buyers to obtain loans and sellers to find qualified borrowers.

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