Fannie Mae and Freddie Mac seller/servicers will continue to face extra charges called "loan level price adjustments" which compensate the GSEs for buying certain non-vanilla mortgages.

Federal Housing Finance Agency acting director Edward DeMarco told a congressional panel that the LLPAs the GSEs charge are periodically reviewed, but gave no indication there would be any coming reductions in these fees.

Rather, he told Rep. Scott Garrett, R-N.J., that the mispricing of risk on loans the GSEs bought between 2006 to 2008 landed them in conservatorships that have cost taxpayers $145 billion, and counting.

Despite better underwriting, Fannie and Freddie will continue to set their fees to cover expected losses on new loans. The regulator also noted that guarantee fees have been reduced and the performance of the 2009 book of loans is quite good.

The current Home Valuation Code of Conduct regulation on appraisals is due to sunset in November. HVCC critics want to see it replaced or abolished, including Rep. Paul Kanjorski, D-Pa., who sponsored appraisal reforms that were incorporated in the House-passed financial services regulatory reform bill.

But the FHFA director told Rep. Kanjorski that the HVCC regulation would still apply to Fannie and Freddie seller/servicers after November. FHFA also is reviewing a new practice of including a private real estate transfer tax in sale documents that allows investors to receive a percentage of future sales proceeds.

DeMarco said he is "troubled" by this practice and FHFA is reviewing the matter to see if this transfer tax should be banned in Fannie/Freddie transactions.

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