Mortgage Rates May Increase in Illinois!
We just found out recently that Illinois has the highest foreclosure rate in the country. Well, now homebuyers may have to pay the price for that.
Fannie Mae and Freddie Mac want to increase the fees charged for the mortgages they acquire in Illinois and four other states. In all five states where Fannie Mae and Freddie Mac are trying to increase fees, foreclosures take an inordinately long time. In Illinois, for example, the average foreclosure takes well over 500 days. Fannie Mae and Freddie Mac feel that they need to recoup the increased costs they suffer as a result of this lengthy foreclosure process in Illinois, Connecticut, Florida, New Jersey and New York.
Fannie Mae and Freddie Mac are increasing some of their fees nationwide effective December 1, 2012. The fees for Illinois and the four other states with long foreclosure processing times, however, are in addition to the nationwide increase that will take effect towards the end of this year.
If the new plan takes effect, it will kick in on January 1 of next year. Illinois homebuyers will be charged an upfront fee of 0.15 percent of their loan amount on condominiums, townhomes, single-family homes, and even apartment buildings up to four units. For every $200,000 in loans, the increased fee will translate to $42 annually. This fee is anticipated to be less than the fee that will be paid by homebuyers in Connecticut, Florida, New Jersey and New York.
The fees are not a done deal yet. The Federal Housing Finance Agency is still weighing the pros and cons. So maybe we won’t end up with extra fees in Illinois after all. Or, maybe, we’ll end up with even greater fees than the ones they anticipate now. It remains to be seen.