Skip to comments.Fannie, Freddie to Hike Loan Fees
Posted on 09/04/2012 10:07:40 AM PDT by illiac
The Federal Housing Finance Agency (FHFA) announced that mortgage giants Fannie Mae and Freddie Mac will increase by an average of 10 basis points the fees they charge lenders to guarantee loans.
The fee increases are expected to be passed along to borrowers, possibly with higher interest rates, Bloomberg reports. However, banking trade groups say any increases should be minimal and shouldnt hurt mortgage lending.
For example, a rise of 10 basis points could potentially cost a borrower with a $200,000 mortgage about $4,000 over the term of a 30-year loan, Bloomberg reports.
Its obviously going to have a small impact on pricing, but given that mortgage rates are the lowest theyve ever been, we think its probably the right time to do it, Joseph Pigg, vice president at the American Bankers Association, told Bloomberg.
The purpose behind the fee increase was to increase the financial stability of the two mortgage giants as well as start decreasing their stake in in the mortgage market, says Edward J. DeMarco, FHFA acting director.
Fannie Mae and Freddie Mac own or guarantee about 60 percent of all mortgages in the U.S.
Not Fannie or Freddie.