The Federal Housing Finance Agency’s sixth annual report on the single-family guarantee fees charged by Fannie Mae and Freddie Mac included data from 2009 to 2013, showing just how intensely g-fees have increased in four years.

In 2013, guarantee fees increased an average of 51 basis points, significantly up from an average of 36 in 2012 and 22 in 2009.

Under the Housing and Economic Recovery Act of 2008, the FHFA is required to submit annual reports to Congress on g-fees.  

“The fees are intended to cover the costs Fannie and Freddie incur for guaranteeing the payment of principal and interest on single-family loans they purchase from mortgage lenders,” the FHFA explained. 

The enterprises charge guarantee fees to cover three types of costs that they expect to incur in providing their guarantee:

  • The costs that the Enterprises expect to bear, on average, as a result of failure of borrowers to make their payments
  • The costs of holding economic capital to protect against potentially much larger, unexpected losses as a result of failure of borrowers to make their payments
  • General and administrative expenses.

Collectively these three costs are the estimated cost of providing the credit guarantee.

This chart better encompasses the charges that have occurred over the past six years.

(Source FHFA; Click to enlarge)


Back in June, the FHFA announced that it was seeking industry opinion on Fannie and Freddie guarantee fees, and while the results of this have not been revealed, Genworth U.S. Mortgage Insurance released results from a study of industry executives conducted at this year’s Mortgage Bankers Association annual conference in Las Vegas, Nevada, giving a preview into what lenders expect to happen with increases.

The survey of 302 mortgage professionals was administered in person at the MBA conference in Las Vegas from October 20-21.

“The survey’s findings were in line with expectations and highlight the need for continued dialogue on regulatory reform and credit access,” said Rohit Gupta, president and CEO of Genworth U.S. Mortgage Insurance. Click the link for charts on the survey's findings.