Gabriel F. Burczyk
Banks are benefiting as mortgage fees rise to the highest levels since 2000. That’s according to data from the Federal Housing Finance Agency. The increase comes with home re-financing poised to hit a two-year high. The average cost of getting a U.S. mortgage was $640 per $100,000 in December and January, the highest since October 2000. In 2005, the end of a five-year housing boom, the cost was $280 per $100,000, the lowest on record. Banks started boosting fees three months ago, before Fannie Mae and Freddie Mac increased the “adverse market delivery charges” they pass on to banks when purchasing loans. Loans to people with credit scores of 680 to 699, the minimum required to be considered a “prime” borrower, will have a fee of 1.5 points. Borrowers with credit scores of 660 to 679 will pay 2.5 points, according to Fannie Mae. The Mortgage Bankers Association boosted its forecast for 2009 home-loan originations by $800 billion to $2.78 trillion as a wave of refinancing and low interest rates spur homeowners to seek out new loans.
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