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Does Fannie Mae charge an underwriting fee? If so, how much?

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March 18 2013 - Mobile
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Answers (6)

The only feasible explanation I can think of is that your loan officer doesn't have a way with words, and is trying to describe to you a Fannie Mae 'Loan Level Pricing Adjustment' (LLPA), and instead of calling it an LLPA he/she is calling it an underwriting fee.

An LLPA is a pricing adjustment for various factors (namely, credit score) that can affect the end pricing the consumer receives.

As an example (these aren't real quotes only hypotheticals):

Suzy with a 740 credit score could get a rate of 4.25 today with a 1 point origination fee

Danny with a 700 credit score could get a rate of 4.25 today with a 2 point origination fee

In the above example, the lender is not making more, the extra point is being passed onto Fannie Mae via the LLPA 

Here is a link to all LLPA's, keep in mind that in this matrix, .50% means the charge will be .50% higher to the borrower not in rate, but in fee.

https://www.fanniemae.com/content/pricing/llpa-matrix.pdf

I hope this helps, I have a feeling that's what's going on here.  

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December 02 2013
That does not sound right.  I would ask for clarification.
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March 20 2013
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Hmmm.  So a lender who states "Fannie Mae charges an underwriting fee of $950" is, um, confused?
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March 20 2013
The guarantee fee is paid upon delivery of the loan, it has nothing to do with underwriting.   Since the fee is known by the secondary market, all lenders will account for this adjustment in the pricing offer for their loans.
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March 20 2013
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What about the "mortgage guarantee fee" charged by Fannie Mae?  I'm thinking that may be getting called an "underwriting fee.  Any insight?
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March 20 2013
Fannie Mae does not charge an underwriting fee.  A lender charges an underwriting fee to offset the expense of have a loan underwritten.  I have seen fees range from $350.00 to $1,200.00. I hope that answers your question. 
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March 18 2013
 
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