Fannie Mae Loans: Just Say “No” to LLPA

The Beatles would say “Money Can’t Buy Me Love” and Fannie Mae would say “A Great Credit Score Can’t Buy You a Home Unless You Grease Our Palm”. I mean where does it stop? Now a home buyer with a credit score of 740 or better needs to pony up a 25% down payment to be off the hook? (I guess a 20% down payment is the old standard!)

So…if you’ve worked hard enough to achieve a pretty coveted credit score of 700 and you had the fortitude to save enough money to be able to put (only!) 20% down on a new home, our friends at Fannie will still charge you a full point (which is 1% of the loan amount) just for the privilege of doing a loan. I hate to say I’ve seen it all because who knows what tomorrow might bring; but come on people.

I mean I get it that they’ve lost money and need to replenish the coffers, but need it be on the backs of the people who should not be penalized? The ones who have shown that they are historically a good risk and will not likely walk away from the loan for which they’ve been approved?

According to the latest LLPA (Loan Level Price Adjustment) — the matrix document that details the amounts applicable to loans delivered to Fannie Mae — whole loans purchased on or after April 1, 2011 are subject to Fannie’s trademark insanity.

And doesn’t Fearless Fannie just publish this chart and then hand mortgage bankers the black hat to pass this additional loan fee stipulation on to Joe Home Buyer?

At the end of the day, I raved about it before in other Fannie Mae loan news; but I think it’s time they pick up their charts and their graphs and take a long walk off a short pier.

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