Often relegated to the pile of “financial blackboxes” among investors, Fannie Mae (NASDAQOTCBB: FNMA ) and Freddie Mac (NASDAQOTCBB: FMCC ) are incredibly profitable. But new changes coming down the pipeline could lead to even fatter bottom lines. Fannie Mae and Freddie Mac’s core business is simple; they insure the bulk of America’s mortgages in exchange for a fee. These fees, known as guaranty fees, or G-fees, have been the subject of recent scrutiny by investors and the government alike.
Since the 2008 financial crisis, guaranty fees have become even more lucrative for Fannie Mae and Freddie Mac.