The typical guarantee fee charged by Fannie Mae and Freddie Mac to lenders rose to a high of 46 basis points in early December. Mortgage borrowers will soon see fees rise as a result, but this will not seriously dent the favourable level of housing affordability. There were some signs in the latest data that favourable affordability is helping to stimulate demand from mortgage-dependent buyers. Meanwhile, mortgage applications for refinancing have been strong for a while now, and much of their recent strength has been driven by refinancing under the Home Affordable Refinance Program (HARP). While HARP got off to a lacklustre start, it is finally having a meaningful impact.
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