On August 12, 2020, Fannie Mae, in Lender Letter 2020-12 (click here-12 ), and Freddie Mac, in Bulletin 2020-32 (click here-32), announced a 50 basis point (0.500%) adverse market refinance fee (called a “loan-level price adjustment” and “LLPA” in Lender Letter 2020-12 and a “Market Condition Credit Fee in Price” in Bulletin 2020-32). For purposes of this memorandum this new fee will be referred to as a LLPA.
For Fannie Mae, the LLPA will apply to limited cash-out refinances and cash-out refinances (except for certain single-family construction-to-permanent loans) purchased, or delivered into MBS pools with issue dates, on or after September 1, 2020.
Full Memorandum
