Accession Number PB2013-105129
Title Fannie Mae and Freddie Mac Single-Family Guarantee Fee in 2010 and 2011.
Publication Date Apr 2012
Media Count 46p
Personal Author N/A
Abstract Fannie Mae and Freddie Mac (the Enterprises) buy single-family mortgages from mortgage companies, commercial banks, credit unions, and other financial institutions. In most cases, a lender receives mortgage-backed securities (MBS) in exchange for the loans. Each Enterprise guarantees the payment of principal and interest on its MBS and charges a fee for providing that guarantee. The guarantee fee covers projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital. Lender guarantee fee payments generally take the form of ongoing monthly payments and frequently also include an upfront payment at the time of Enterprise loan acquisition. A lender typically passes through to the borrower the cost of an upfront fee in the form of a slightly higher interest rate on the mortgage, since borrowers tend to choose not to pay points. Ongoing fees are also included in the interest rate charged to the borrower. Therefore, as a practical matter, whether the Enterprises charge guarantee fees to lenders as ongoing fees or upfront fees typically makes no difference to borrowers. Section 1601 of the Housing and Economic Recovery Act of 2008 (HERA) requires the Federal Housing Finance Agency (FHFA) to conduct an ongoing study of the guarantee fees charged by Fannie Mae and Freddie Mac and to submit annual reports to Congress, based on aggregated data collected from the Enterprises, regarding the amount of such fees and the criteria used by the Enterprises to determine them. This report, the fourth prepared by FHFA in fulfillment of Section 1601, covers guarantee fees charged by the Enterprises in 2010 and 2011. The report focuses on fees charged by the Enterprises for guaranteeing conventional single-family mortgagesloans that are not insured or guaranteed by the federal government and that finance properties with four or fewer residential units.
Keywords Banking
Capital
Costs
Credit
Fannie Mae
Fees
Financial management
Freddie Mac
Housing
Loans
Losses
Mortgages
Single family houses
US HUD


 
Source Agency Federal Housing Administration
NTIS Subject Category 96F - Banking & Finance
70F - Public Administration & Government
91E - Housing
Corporate Author Federal Housing Finance Board, Washington, DC.
Document Type Technical report
Title Note N/A
NTIS Issue Number 1312
Contract Number N/A

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