Magazine article Mortgage Banking

Guarantee Fees Doubled from 2009 to 2013

Magazine article Mortgage Banking

Guarantee Fees Doubled from 2009 to 2013

Article excerpt

[ILLUSTRATION OMITTED]

In the sixth annual report issued by the Federal Housing Finance Agency (FHFA) on the guarantee fees (g-fees) charged by Fannie Mae and Freddie Mac on their single-family business, the numbers document what lenders have been pretty vocal about for years. Guarantee fees on loans sold to Fannie and Freddie have been going through the roof--and until recently showed no signs of stopping.

The new report includes data from 2009 through 2013 that shows g-fees "more than doubled" and that the annual rate of increase in 2013 was higher than in the prior four years.

A news release from FHFA reported that guarantee fees increased to an average of 51 basis points in 2013. That was up from an average of 36 basis points in 2012 and 22 basis points in 2009.

Before current FHFA Director Mel Watt was appointed to run the agency, his predecessor had proposed a new round of g-fee hikes. Watt froze that increase and published a request for input in June 2014 on a number of questions related to future guarantee fee policies and implementation. …

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