GSEs Guarantee Fees Experience 22 to 26 Year Over Year Rise in Basis Points – NMP Skip to main content

GSEs Guarantee Fees Experience 22 to 26 Year Over Year Rise in Basis Points

NationalMortgageProfessional.com
Sep 23, 2011

The Federal Housing Finance Agency (FHFA) has released its third annual report on guarantee fees (g-fees) charged by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. concluding that the average “g-fee” on single-family mortgages increased in 2010 relative to 2009, from 22 basis points to 26 basis points. The FHFA currently serves as the conservator of the GSEs. The report, "Fannie Mae and Freddie Mac Single-Family Guarantee Fees in 2009 and 2010," finds that the GSEs’ g-fees continued to convey cross-subsidies from mortgages that posed lower credit risk, on average, to loans that posed higher credit risk, but overall that cross-subsidization was substantially less in 2009 and 2010 than in 2007 or 2008. Lenders that delivered smaller volumes of mortgages to the GSEs, on average, paid higher guarantee fees on loans of similar credit quality than did larger-volume lenders.  The Housing and Economic Recovery Act of 2008 (HERA) requires FHFA to study the fees charged by the GSEs for guaranteeing securities backed by single-family mortgages that are not insured or guaranteed by the federal government and that finance properties with four or fewer residential units. Those fees cover projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital. In addition to estimated costs and the competitive environment, the GSEs consider a number of other factors in determining the single-family guarantee fees they charge. Those factors include the mandates of safety and soundness, regulatory affordable housing goals, and their charter obligations.  
Published
Sep 23, 2011
CFPB Alters Threshold For Exempting Loans From Special Appraisal Requirements

The 2022 threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will increase from $27,200 to $28,500. 

Regulation and Compliance
Dec 02, 2021
Regulatory Review, Reformatted

The progress made to date with NMLS modernization

Regulation and Compliance
Dec 01, 2021
November Surprise: Fed May Accelerate Tapering

Chairman Powell tells Congress of concerns about inflation, COVID-19 variant’s effect on recovery.

Regulation and Compliance
Dec 01, 2021
FHFA's 2022 Conforming Loan Limit Maxes Out At Nearly $1M

Baseline limit for Fannie, Freddie increases to $647,200, but for 'high-cost areas' loan ceiling set at $970,800 for single-family homes.

Regulation and Compliance
Dec 01, 2021
Regulators Are Back In The Saddle

There’s not only a new sherriff in town, it’s a whole gang of them.

Regulation and Compliance
Nov 29, 2021
CFPB Seeks Insight On Creating A Fairer Mortgage Market

The Consumer Financial Protection Bureau has been actively looking to create a fairer mortgage market, free of discriminatory engagements. To do so, it issued a Request for Information to seek input on rules implementing the Home Mortgage Disclosure Act.

Regulation and Compliance
Nov 17, 2021