The White House plan to revamp Fannie Mae and Freddie Mac will mandate that the two charge higher guarantee fees over the next few years, and also will allow the GSE loan cap to fall back to $625,500 by the fall, according to Washington sources.
The two GSEs continue to maintain strategic alliance deals with certain of their high volume seller/servicers. These mortgage bankers receive discounts on their g-fees in return for selling a large majority of their originations to one GSE or the other. (This past week Fannie and Freddie officials declined to comment to ASR's sister publication National Mortgage News about their g-fee deals.)
Rep. Randy Neugebauer (R-Texas), during a recent speech at a GSE forum in Washington, told regulators, academics, trade group officials and others that the g-fees are underpriced and should be raised.
Meanwhile, Washington sources noted that the administration's proposals are being shaped by top executives at the Department of Housing and Urban Development, including FHA commissioner David Stevens.
The current GSE loan cap is $729,750 but that only applies to high cost metropolitan areas. Several firms are now forming conduits to enter the jumbo space.
Housing finance lobbyists anticipate that the proposal will be released along with the President's budget during the week of Feb. 14, though details are expected to emerge early next week, before Wednesday's House subcommittee hearing on the GSEs being chaired by Rep. Scott Garrett (R-N.J.).
At the very least, it appears that the plan's goal is to reduce the government's share of the mortgage market to at least 50% over the short term. According to figures compiled by NMN, the GSEs had a 76% market share in 2010.