Proposed new capital requirements for mortgage insurers made by the GSEs are likely to feed through to borrowers in the form of higher costs, according to a report from Moody's Analytics and the Urban Institute (something some mortgage insurers themselves have already said).
On average, borrowers could expect to pay an extra 15 basis points in mortgage insurance premiums, and those with lower credit scores maybe another 70 bps.
Balancing out possible higher M/I costs could be lower fees from Fannie and Freddie. Some suspect the GSEs charge higher fees to guarantee certain mortgages because they suspect mortgage insurers won't be able to make good. To the extent the new rules ease that worry, those boosted fees could slip back.
Comments on the draft rules are due by September 8.