Repeal of a 2020 costly policy followed FHFA’s changing of the guard. The result – instant drop in costs for Conventional refinance clients.
Conventional Refinance Rates Drop
Out with the old in with the new best describes this weeks instant rate drop for Conventional refinance loans. In 2020, then FHFA director Mark Calabria added a fee to all new Conventional refinance loans. The fee added closing costs or hiked the rate on Conventional refinance customers.
Thankfully, weeks after Calabria’s dethroning his costly 2020 refinance policy is a thing of the past. The net result – refinance rates/closing costs for Conventional borrowers dropped instantly.
Why The Back And Forth
Calabria delivered his 2020 rate cost hike cloaked in creative reasoning. However, the theories behind why were in large supply. The most popular – his cash grab was born to finance changes to Fannie Mae and Freddie Mac.
After all, the record low pandemic spawned rates generated massive refinance activity. Some say Calabria leveraged the revenue to come in the following months/years to achieve his GSE goals.
What The Sudden Rate Improvement Means
While mortgage rates shift due to market dynamics, the removal of the 2020 Conventional refi rate/cost increase keeps rates lower. In other words, Conventional refi interest rates/costs are lower than had this 2020 increase not been removed.