The guarantee fees that Fannie Mae and Freddie Mac charge will remain at current levels with “modest adjustments,” the Federal Housing Finance Agency said on Friday. The announcement followed a review that determined g-fees are at an appropriate level.
FHFA directed Fannie and Freddie to eliminate the “adverse market charge” imposed in March 2008, with the revenue from that fee to be replaced by targeted g-fee increases based on risk and access-to-credit considerations. “Overall, the set of modest changes to guarantee fees are roughly revenue-neutral for [Fannie and Freddie] and will result in either little or no change for most borrowers,” FHFA said.
ABA urged FHFA last year not to raise g-fees at this time, noting that higher fees would make GSE reform more difficult politically — since GSE profits are swept into the Treasury and with higher g-fees would become a bigger stream of federal income. ABA said it supports increases as part of a “holistic approach” designed to return private capital to the secondary market.