MPF Xtra Selling Guide Updates
Effective Date: September 1, 2020
On August 12, 2020 Fannie Mae issued Lender Letter LL-2020-12, implementing a new adverse market refinance fee (loan-level price adjustment) that will apply to most refinances. The terms of this LLPA are described below:
- Limited cash-out refinances
- Cash-out refinances
Exception: Single-closing construction-to-permanent loans that are processed and delivered as a refinance with Special Feature Code 151 are not subject to this LLPA.
Loan Level Price Adjustment (LLPA):
- 50 basis points (0.500%)
- This LLPA is in addition to any other price adjustments that are otherwise applicable to the particular transaction. This LLPA applies to HomeReady refinances without regard to the cap that otherwise applies to those transactions.
Please note, that the LLPA’s outlined in the Lender Letter apply to existing and future MPF Xtra Delivery Commitments funded on or after 9/1/2020.
As a reminder, it is important to be aware of the distinction between funding requests and the date of actual funding; the Lender Letter is referencing the date of funding by Fannie Mae and not the date of funding request to MPF.
To avoid any last minute potential setbacks, please work with the MPF Service Center to attempt to move the funding date to 8/28/20 or earlier. If requesting earlier funding dates is not possible, please collaborate with us to ensure a smooth delivery. Any loans that cannot be funded on 8/31/20 because of a data issue, or any other delivery issue, will be assessed the 50 BP fee by Fannie Mae.
To gain a full understanding of these topics, PFIs should review the entire Fannie Mae Announcement and any applicable Fannie Mae Selling Guide chapters, forms, or exhibits noted in the announcements.