Fannie Mae and Freddie Mac Single-Family Guarantee Fees in 2010 and 2011.

摘要

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.