Acquiring a mortgage loan
Acquiring a mortgage loan - 
Listen To The Story


Tess Vigeland: I'm starting to wonder if and when the housing market will stop being a lead story in this country. But until that happens, new rules that went into effect on January 1st say that if you don't get the best terms on your mortgage, your lender has to tell you. And tell you why.

But not all the new rules are going the way of the consumer. Fannie Mae and Freddie Mac are getting tough on anyone with any sort of question mark in their finances. Marketplace's Stacey Vanek Smith has our story.

Stacey Vanek Smith: It's hard to find a more financially prepared homebuyer than Arthur Chadwick. He and his wife closed on a home in Los Angeles earlier this month, after spending years watching the market, paying down debts, squirreling money away, and generally doing everything right.

Arthur Chadwick: We had paid off our student loans before even thinking about houses. We had a solid 20 percent down. We really had a very realistic idea of how much we could spend and no amount of bullying was going to get us to go above that. We were both just mule-headed enough.

And soon, even good credit risks like the Chadwicks will also need an eagle eye for the details of the mortgage: Fannie Mae and Freddie Mac are getting stricter. The government-backed entities buy mortgages from lenders and when they impose a fee on lenders, it gets passed along to homebuyers. In coming months, Fannie and Freddie will raise fees on loans they deem risky. Cameron Findlay is chief economist at Lending Tree.

Cameron Findlay: Fannie Mae will look at this and say, what costs are we going to incur by guaranteeing these loans?

The fees will range from .25 percent of the total loan up to 3.5 percent. They're based on two factors: the size of the down payment and the borrower's credit score. Findlay says even loans to borrowers with excellent credit may get dinged with fees from Fannie and Freddie.

Findlay: They're now saying, not only do we have concerns for poor credit borrowers, we're also now more closely evaluating high credit borrowers.

Risk-based fees get passed along to borrowers in one of two ways: your lender might charge you a flat fee, or might factor the fee into your interest rate. The new fees work out to about $500 more for every $100,000 borrowed. Freddie Mac points out that for a $200,000 fixed-rate mortgage, most borrowers would pay only $10 more a month.

Columbia Business School's Chris Mayer says even so...

Chris Mayer: That takes away buying power from someone who's thinking about buying a home.

Mayer says the new penalties are too strict. He says these are not the go-go days of the housing bubble, and the loans Fannie and Freddie buy these days are more conservative and carefully vetted.

Greg McBride is a senior financial analyst at His advice to minimize the impact of these new fees is to take the time you need to boost your credit score and save up enough to make as big a down payment as possible.

Greg McBride: If you need to take six months or 12 months to put your best foot forward and get the best loan on the best terms, well then go ahead and do it. Because unlike during the housing boom, when home prices were going up by leaps and bounds, home prices aren't going to run away from you in the meantime.

Freddie Mac's new standards go into effect on March 1st; Fannie Mae starts charging its new fees a month later.

I'm Stacey Vanek Smith for Marketplace Money.

Follow Stacey Vanek Smith at @svaneksmith