WASHINGTON Dec 9 Government-run Fannie Mae
and Freddie Mac will raise the fees they
charge mortgage lenders for guaranteeing new loans in March to
encourage private firms to wade back into the housing finance
The so-called guarantee fees that the two taxpayer-owned
companies charge lenders will increase by an average of 10 basis
points, or one-tenth of one percent, their regulator said in a
Increasing the fees will make loans backed by Fannie Mae and
Freddie Mac more expensive, making it easier for private sources
of capital to compete.
The government wants to reduce the burden on taxpayers of
running the two companies and have private companies take their
place in a market they largely abandoned during the financial
Edward DeMarco, acting director of the Federal Housing
Finance Agency, which regulates the firms, said the fee
increases are needed to shrink the footprint of the two
"The price changes provide better protection of and return
to taxpayers, who are providing the capital support that keeps
these companies operating," he said. "These changes should
encourage further return of private capital to the mortgage
Fannie Mae and Freddie Mac have received $187.5 billion in
taxpayer aid since they were taken over by the government in
2008 as soured loans threatened their solvency. They have paid
about $185.2 billion in dividends to the government for that
The fees they charge to guarantee principal and interest
have almost doubled since 2009, a policy the regulator has used
to dampen Fannie and Freddie's footprint in the mortgage market.
The FHFA said Fannie Mae and Freddie Mac will also alter
pricing frameworks used to assess credit risk and, in most
markets, eliminate an up-front 25 basis point "adverse market"
fee they have been charging since 2008. They would still charge
the fee in New York, Florida, New Jersey and Connecticut, where
foreclosure costs remain elevated.
Taken together, all the steps would produce an average fee
increase of about 11 basis points, it said.