The New York Times

By LISA PREVOST

Published: January 2, 2014

The long foreclosure timelines in New York, New Jersey and Connecticut may translate into slightly higher borrowing costs for consumers in those states.

The Federal Housing Finance Agency announced last month that, because the stress in housing markets has eased,

it was eliminating the across-the-board adverse-market fee instituted in 2008 to help cover the costs of high rates of delinquencies. The fee, applicable to all mortgages bought by Fannie Mae or Freddie Mac, is 25 basis points, or 0.25 percent of the mortgage loan amount.

But the agency, citing the “significantly greater costs” associated with much longer foreclosure timelines in the tristate area and in Florida, said the fee would remain in place in these four states.

The fee isn’t onerous — an added $5.95 a month, for example, on a 30-year loan of $200,000 at a rate of 4.5 percent. And it isn’t a closing cost, noted Jordan Roth, the senior branch manager of the Manhattan office of GFI Mortgage Bankers. “It is a fee that gets added into the rate or, as we like to say, baked into the rate,” he said.

Still, the singling out of states that take a long time to process foreclosures through their judicial systems does represent a shift in regulatory thinking. “It’s effectively a recognition that the cost to lend in a market that has long judicial foreclosure timelines needs to be accounted for,” said Mark Fleming, the chief economist for CoreLogic, a real estate data service. “If it takes two years to get through a foreclosure, time is money.”

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