Fannie Mae and Freddie Mac's guarantee fees (g-fees) on single-family mortgages are about to go up by an average of 10 basis points.  The increase was announced by the Federal Housing Finance Agency (FHFA) this morning and will take effect for loans sold for cash on November 1 and for loans exchanged for mortgage-backed securities (MBS) one month later.   

FHFA said the change to the g-fee pricing is intended to encourage greater participation in the mortgage market by private firms, a goal set in the agency's Strategic Plan for Enterprise Conservatorships.  The two government-sponsored enterprises (GSEs) said they will work directly with lenders to implement the changes.

Looks like overall housing policy with respect to Fannie and Freddie isn't even going to be debated; FHFA will just use its statutory to set fees to jack them up to a point at which there will be major disincentives to utilizing the GSEs. Not that this is terribly objectionable, as long as the fees truly do go to removing moral hazards in how the loans are subsidized (last time, the fee increase was simply to pay for the unemployment extension, so you had the public essentially subsidizing themselves).

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