Washington, D.C. – The Federal Housing Finance Agency (FHFA) today released its annual report on the single-family guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises). The report discusses guarantee fees charged in 2015 and provides a five-year perspective on guarantee fees dating back to 2011.
In April 2015, FHFA completed a comprehensive review of the Enterprises' single-family guarantee fees and found no compelling economic reason to change their overall level. However, FHFA directed the Enterprises to eliminate the adverse market charge that had been in place since 2008 and to apply small upfront fee increases for a targeted subset of loans. Overall, guarantee fees for 2015 remained similar to 2014.
The report also found that, consistent with action taken by FHFA in late 2012 to remove pricing concessions for the largest lenders, the guarantee fees charged to the largest and smallest lenders had no material differences. Guarantee fees for the smallest and largest lenders were relatively unchanged in 2015.
The Housing and Economic Recovery Act of 2008 requires FHFA to submit a report to Congress annually on guarantee fees. Guarantee fees are intended to cover the costs the Enterprises incur for guaranteeing the payment of principal and interest on single-family loans they acquire from mortgage lenders. These costs include projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital.
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