Raise “g-fees” says Congress

Origination News says a bi-partisan Congressional effort to increase the guarantee fees, or “g-fees,” that Fannie Mae and Freddie Mac charge lenders will level the playing field so private lenders can return to the mortgage market. “Private secondary market investors are starving for yield, and raising the g-fees to a level where they can compete would allow private capital to come back into the market,” says Terry Wakefield, the chief executive of Wakefield Co., a Mequon, Wis., mortgage consulting firm. One point of contention in the mortgage industry is the volume discounts the GSEs gave large banks, which consolidated loans in fewer hands, shutting out smaller lenders and community banks.

(Graphic/Photo credit: Bankrate)

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