The Federal Housing Finance Agency (FHFA) has instructed the government-sponsored enterprises (GSEs) to increase their guarantee fees charged on single-family mortgage-backed securities by 10 basis points (bps).
In a statement issued by FHFA Acting Director Edward DeMarco, the increase is linked to the temporary payroll tax cut legislation signed by President Obama on Dec. 23.
‘This requirement is effective immediately, meaning that the average guarantee fees charged in 2012 need be at least 10 bps greater than the average guarantee fees charged in 2011 and that this increase be remitted to the U.S. Treasury, rather than retained as reserves by the [GSEs],’ DeMarco said. ‘The law also requires FHFA to determine a schedule for guarantee fee increases over a two-year period that must satisfy other requirements of the law.
‘To begin implementation of these requirements,’ DeMarco continued, ‘I am directing Fannie Mae and Freddie Mac to announce before year-end to their seller-servicers that, effective April 1, 2012, the guarantee fee on all single-family residential mortgages shall increase by 10 bps. In early 2012, FHFA will further analyze whether additional guarantee fee increases are appropriate to ensure the new requirements are being met. FHFA will announce plans for further guarantee fee increases or other fee adjustments that will then be implemented gradually over the two-year implementation window, taking into consideration risk levels and conditions in financial markets.’