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Chrisman's Corner: JMAC's Brokers Know That Not Every Loan's Pricing Is the Same

The term “LLPA” has nothing to do with golf (LPGA) and everything to do with loans. Our brokers know that the acronym stands for Loan Level Price Adjustments. These include adjustments in price for: investment properties, condos, credit scores, loan to value, etc. Recently lenders across the nation began rolling out the new LLPA adjustments and these adjustments are not all consumer friendly.
On the positive side, Fannie Mae removed its “adverse market fee” of .250. But although the recent Greek and China issues helped to lower rates in the last several weeks, the new LLPA numbers came into play so the full benefit of the decline was offset by these increases.
Here is a sampling of the changes (all adjustments are to fee not rate). These are for comparison purposes – be sure to talk to your JMAC AE for exact details. For investment properties with 25% down, the old adjustment was 1.75 the new adjustment is 2.125. Investment properties with 20% down old was 3.00 new is 3.375. For owner occupied loans that had a 60% LTV or less and a credit score of 700 and higher the borrower would get a .25 credit, now that credit has disappeared. The cost of a cash-out refi across all LTV’s and credit scores is up by.375. Even loans with secondary financing (80-10-10 or 75-15-10) are getting hit. For the privilege of doing an 80-10-10, it will cost .375 more than previously. 
As mentioned above, supposedly all loans had a .25 reduction in fee, and depending on a lender like JMAC’s product mix, the overall picture may show a benefit. But like making a sausage with many ingredients, it may be in there but it is impossible to know with rates moving around every day.