Following weeks of debate over whether the Federal Housing Finance Agency (FHFA) would be lowering its fees to guarantee mortgages backed by Fannie Mae and Freddie Mac, the Agency announced Friday that G-fees would stay at their current levels with only modest adjustments.
A comprehensive review of the G-fees determined that the current fees charged are at an appropriate level. The review also determined that some modest adjustments to upfront guarantee fees are appropriate, according to FHFA.
"This is the culmination of months of review and analysis and reflects input received from a wide range of stakeholders," FHFA Director Melvin L. Watt said. "Our goal is to assure taxpayers, homeowners and industry that we are striving for an appropriate balance between safety and soundness and liquidity in the housing finance market."
When considering adjustments to G-fees for certain categories of loans, FHFA took into account the decision (also announced Friday) to enhance the eligibility standards for mortgage insurance companies. Overall, the FHFA said, the modest changes being made to the upfront G-fees are revenue neutral and will mean little or no change for Fannie Mae and Freddie Mac.
FHFA is directing the GSEs to remove the adverse market charge put in place in March 2008 (six months before the FHFA's conservatorship of the GSEs began) and replace the revenue that resulted from the adverse market charge with targeted G-fee increases to address various risk-based and access-to-credit considerations.
Click here to see a fact sheet on the current guarantee fees and the complete results of FHFA's recently-completed review. According to FHFA, the Agency will continue to monitor the G-fees on an ongoing basis and make any appropriate changes as needed.