In a move intended to level the playing field in the mortgage market, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac not to provide volume-based discounts for guarantee fees they charge lenders. Such discounts were responsible for market distortions in the lead-up to the financial crisis more than a decade ago, FHFA Director Mark Calabria noted at a mortgage industry event today.
“We’re looking to try to make sure . . . that Fannie and Freddie aren’t driving consolidation in the market but instead they’re providing a level playing field,” Calabria said, noting that FHFA issued a formal directive to the GSEs last week, and that it will ensure compliance with the ban through the GSEs’ regular reporting. ABA has long held that g-fees should be assessed equally on all lenders, and should reflect the true cost of the government sponsored guarantee.