The Federal Housing Finance Agency (FHFA) Friday morning directed Fannie Mae and Freddie Mac to increase their loan guarantee fees by an average of 10 basis points starting Nov. 1.

“The changes to guarantee fees on single-family loan pricing present a step toward encouraging greater participation in the mortgage market by private firms,” the FHFA said in a press statement.

In implementing the g-fee hike, the two mortgage giants are supposed to make the guarantee fees “more uniform” between large and small lenders.

The secondary market agencies have a history of charging small lenders higher fees than larger lenders.

For loans sold to Fannie and Freddie for cash, the g-fee increase will go into effect with commitments starting Nov. 1. But for seller/servicers exchanging loans for GSE-guaranteed MBS the g-fee hike comes a month later on Dec. 1.

“These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if the mortgage credit risk was borne solely by private capital,” FHFA acting director Edward DeMarco said.

In a July 31 letter to Congress, the FHFA first signaled the g-fee hike was coming. The cost will be passed onto consumers by seller/servicers.

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