The cost of doing business with the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. just became more expensive. The good news is that loans in most states will no longer be assessed an adverse market fee.
Back in February of last year, the Federal Housing Finance Agency issued its Strategic Plan for Enterprise Conservatorships.
Among the steps that the regulator planned to take to reduce Fannie Mae’s and Freddie Mac’s dominance in the mortgage market was an increase in guarantee fees.
On Monday, FHFA announced that g-fees for all loans will increase by 10 basis points.
In addition, the up-front g-fee grid will be updated to better align pricing with the credit risk characteristics of the borrower.
However, the up-front 25 basis point adverse market fee that has been assessed on all Fannie and Freddie loans since 2008 is being eliminated on loans in all but four states where the e foreclosure carrying costs are more than two standard deviations greater than the national average.
The adverse market fee will be maintained in Connecticut, Florida New Jersey and New York.
The changes impact loans exchanged for mortgage-backed securities with settlement dates beginning on April 1, 2014.
On loans sold for cash, mortgages with commitments dates starting on March 1, 2014, will be affected.
The announcement about higher g-fees comes just a day before a Rep. Mel Watt (D.-N.C.) could be confirmed by the U.S. Senate to replace Acting FHFA Director Edward DeMarco.
