The average fee charged by Fannie Mae (FNMA) and Freddie Mac (FMCC) to lenders rose last year, but subsidies from lower-risk mortgages to higher-risk ones continued, a federal regulator found Friday. Fannie and Freddie are government-controlled mortgage-finance companies. They don't directly make mortgages but provide a federal guarantee that protects investors in mortgage-backed securities if borrowers default. The two firms were put under federal control three years ago after rising losses threatened to burn through their thin capital cushions. The government has spent $141 billion to keep them going. The report by the Federal Housing Finance Agency found that on average, Fannie and Freddie charged a fee of 0.26 percentage point of the loan's value for every loan they guaranteed. That compares with 0.22 percentage point a year earlier.
Read the rest of the article at the Wall Street Journal
No comments:
Post a Comment