The Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac to raise guarantee fees (G-fees) on single-family mortgages by an average of 10 basis points (bps). According to the FHFA, the changes to G-fee pricing represent a step toward encouraging greater participation in the mortgage market by private firms.
‘These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if mortgage credit risk was borne solely by private capital,’ says Edward DeMarco, acting director of FHFA.
For loans exchanged for mortgage-backed securities (MBS), the increase will be effective with settlements starting Dec. 1. For loans sold for cash, the increases will be effective with commitments starting Nov. 1. Fannie Mae and Freddie Mac will work directly with lenders to implement the changes.
Separately, the FHFA released its fourth annual report on single-family G-fees, covering the years 2010 and 2011. The report, which is required by the Housing and Economic Recovery Act of 2008, found that the average G-fee charged by Fannie Mae and Freddie Mac increased from 26 bps in 2010 to 28 bps in 2011.