This commentary examines the potential impact of increasing the guarantee fees that Fannie Mae and Freddie Mac charge lenders. We identify the three most important assumptions made in determining the fees, conclude that transparency regarding these assumptions is critical, and that, under any reasonable set of assumptions, the fees should not be increased for the least risky loans. We also conclude that the GSEs’ mission should be taken into account in determining the appropriate capital requirement.
Guarantee Fees – An Art, Not a Science
DO YOU HAVE THE "WRITE" STUFF? If you’re ready to share your wisdom of experience, we’re ready to share it with our massive global audience – by giving you the opportunity to become a published Contributor on our award-winning Site with (your own byline). And who knows? – it may be your first step in discovering your “hidden Hemmingway”. LEARN MORE HERE