Industry NewsMortgage

Fannie raising fees, tightening standards

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Fannie Mae is tightening underwriting standards, increasing fees, and will stop buying newly originated alt-A loans by the end of the year, the company said in announcing a $2.3 billion quarterly loss. The nation's biggest financer of mortgages also said it's opening new offices to sell real estate-owned properties in hard hit areas like California and Florida, and is bringing on new employees in loss mitigation to engage in more workouts with troubled borrowers. Earlier this week, Fannie said it is doubling an "adverse market delivery charge" on all loans to 0.5 percent beginning Oct. 1. The charge now amounts to $1,000 on a $200,000 mortgage. At the same time, Fannie Mae said it is changing its loan-level price adjustments (LLPA) and will require most borrowers making down payments just large enough to avoid mortgage insurance to pay higher fees. Under the new LLPA structure, it will actually cost borrowers with credit scores above 620 less to take out mo...