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Article: Freddie Drops ARM Fee Level.(Freddie Macs adjustable rate mortgage)
- Article from:
- Mortgage Servicing News
- Article date:
- May 1, 2004
- Author:
CopyrightCOPYRIGHT 2004 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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In a move that makes it easier to originate adjustable-rate mortgages, Freddie Mac has reduced the servicing spread for all ARM products from 0.375% down to 0.25%. The lower minimum servicing spread gives lenders more flexibility when selling ARM and balloon/reset products, the company said.
The cutting of the minimum servicing spread will have a positive impact on ARM originations. The 12.5 basis point reduction will help to make ARM rates even more competitive because it is "an extra one-eighth in servicing costs [servicers] don't have to collect," said Dave Stevens, senior vice president of single family lending.
Even as mortgage rates remain at ...