WASHINGTON Dec 9 Fannie Mae and
Freddie Mac will raise certain fees they charge
mortgage lenders, their regulator said on Monday, a step
designed to encourage private firms to wade back into the
housing finance market.
The so-called guarantee fees that the two taxpayer-owned
companies charge lenders to guarantee new loans will increase by
an average of 10 basis points, the Federal Housing Finance
Agency said in a statement.
Increasing the guarantee fee will ultimately make it more
expensive for lenders to use the government-controlled companies
to back their loans and give them an incentive to use the
financial market instead.
Edward DeMarco, acting director of the Federal Housing
Finance Agency, said the fee increases are needed to shrink the
footprint of the two companies in the mortgage market.
"The price changes provide better protection of and return
to taxpayers, who are providing the capital support that keeps
these companies operating. These changes should encourage
further return of private capital to the mortgage market,"
Fannie Mae and Freddie Mac charge the fees to investors for
guaranteeing principal and interest.
In addition to a yearly 10-basis point increase, the FHFA
said Fannie and Freddie will alter the pricing frameworks used
to assess credit risk characteristics of borrowers. The agency
also eliminated most across-the-board adverse market fees.
FHFA said it anticipates that this adverse market fee will
be re-evaluated on an annual basis.