User login

FHFA Announces Increase in Guarantee Fees

The Federal Housing Finance Agency recently announced that it has directed Fannie Mae (FNMA) and Freddie Mac (FHLMC) to raise guarantee fees on single-family mortgages by an average of 10 basis points (bps). For loans exchanged for mortgage-backed securities, the increase will be effective with settlements starting December 1, 2012. For loans sold for cash, the increases will be effective with commitments starting November 1, 2012. FNMA and FHLMC will work directly with lenders to implement these changes.

According to FHFA, the increase will:

  • Make more uniform the guarantee fees that FNMA and FHLMC charge lenders who deliver large volumes of loans as compared to those who deliver smaller volumes; and
  • Reduce cross-subsidies between higher-risk and lower-risk mortgages by increasing guarantee fees on loans with maturities longer than 15 years more than on shorter-maturity loans.

According to the agency, guarantee fees charged by FNMA and FHLMC increased from 26 bps in 2010 to 28 bps in 2011. For a link to FHFA’s press release, click here.

Share/Save