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Mortgage Rates Still Battling Hangover From Last Week's Drama

Posted To: Mortgage Rate Watch

Mortgage rates are still coping with the after-effects of last week’s surprise implementation of a new fee on refinances. The fee in question is technically an LLPA (Loan-Leve-Price-Adjustment). LLPAs are a normal part of the mortgage pricing process and they help lenders account for different risk factors (credit score, equity, occupancy, etc.). The new refi LLPA is a bit different in that it’s in a sub-category known as an “adverse market fee.” This is the agencies’ way of collecting extra money to compensate for extra risks–hopefully transitory ones. None of the above would have been a big deal for the mortgage industry had the new fee been rolled out like every other fee: with plenty of advanced notice and in logical, palatable amount. As it stands, it more than doubled the average fee…(read more)

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