Mortgage-Guarantee Fee Hike Gets Delayed

New fees on government-backed loans from mortgage giants Fannie Mae and Freddie Mac that were supposed to go into effect this year will be delayed for further evaluation.

The FHFA announced Wednesday that the rise in the fees the two companies charge lenders to guarantee loans would be pushed off until its effects could be better evaluated. The increase was supposed to go into effect in March. Often, fees like this are passed along to borrowers, which would increase mortgage borrowing costs.

Government-backed mortgage giants Fannie Mae and Freddie Mac do not issue loans but they purchase them and guarantee payments of principal.

The plan will increase the base guarantee fee for all mortgages by 10 basis points and eliminate an adverse market fee of 25 basis points on all mortgages purchased by Fannie and Freddie since 2008, except in four states: New York, New Jersey, Connecticut and Florida.

The FHFA said in December the proposed fees will rise an average of 14 basis points on typical 30-year fixed-rate mortgages under the proposal.

Melvin Watt, the new director of the Federal Housing Finance Agency, announced in December his plans to delay the increase.

“The implications for mortgage credit availability and how these changes might interact with the new qualified mortgage standards could be significant,” Watt said in a statement Wednesday. He said his agency will conduct a “thorough evaluation” of the proposed fees and would give at least 120 days notice of any possible changes.