I know…I know. Loan Level Price adjustments (LLPA’s) are here and they’re here to ruin everything….
This is the sentiment around the industry right now and I’m trying to spread the word that…well…it’s not that bad. These adjustments have always been in place they’ve just never created headlines like the ones you’ve seen recently. Your clients have always taken a hit for things like loan to value, credit scores and waiving escrows among other triggers. I’m sending this out to all realtor partners and I wish I had an email address for the producers at Good Morning America because even they told me yesterday that a lower credit score would give you a better rate than a higher credit score.
The news that Freddie and Fannie were altering LLPA’s on loans delivered after May 1st came out earlier this year (with no national news fanfare) but now that the changes have actually been enacted it’s got the internet all abuzz that pricing has been turned upside down. Here’s what to remember about a May 1st delivery date: loans are generally delivered a month after closing, so those loans closed in April. So they were priced in February or March. The lenders pricing those loans were well aware of the LLPA’s on those loans marked for delivery in May and the LLPA’s were already in place. So we’ve been in an environment where these price adjustments have already been included in product offerings by your lender for a while now and everything seems to be going ok…
Don’t panic. Don’t let your buyers panic. But do have them call me to get pre approved. If you want a good read about the adjustments please read the article here.