RALEIGH, North Carolina (Reuters) – Fannie Mae and Freddie Mac, the country’s two largest mortgage finance providers, are expected to gradually increase the fees they charge lenders in the next year, their federal regulator said on Monday.
The “guarantee fees” that the two government-owned companies charge would be increased in order to lessen the companies’ long-term exposure to risk, said Edward DeMarco, acting director of the Federal Housing Finance Agency.
The two firms, which were seized by the government three years ago amid fears they at risk of failing, do not directly make loans. They provide financing to banks and lenders by purchasing mortgages and either keeping them on their books or packaging them for sale to investors. Those investors pay Fannie and Freddie a “guarantee fee” when they buy mortgages.
An increase in fees would be in line with the housing agency’s “mandate as conservator and in terms of moving toward something that better reflects a fully private model,” DeMarco told reporters after addressing a mortgage conference sponsored by the North Carolina Mortgage Bankers Association.
He said Fannie and Freddie should begin “the gradual process of increasing guarantee fees” in 2012.
Fannie and Freddie have so far cost taxpayers more than $140 billion.
The White
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