Reuters: Regulatory News: UPDATE 1-Fannie Mae, Freddie Mac to raise mortgage fees-US regulator

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UPDATE 1-Fannie Mae, Freddie Mac to raise mortgage fees-US regulator Aug 31st 2012, 14:48 Fri Aug 31, 2012 10:48am EDT WASHINGTON Aug 31 (Reuters) - Fannie Mae and Freddie Mac w ill raise the fees they charge mortgage customers b y the end of the year, their regulator said on Fr iday, a step designed to encourage private firms to wade back into the housing finance market. The so-called guarantee fees or g-fees that the two government-controlled companies c harge lenders to guarantee new loans wi ll increase by an average of 10 basis points, the Federal Housing Finance Agency said in a statement. The Obama administration has proposed increasing the fees as a way to reduce the government's role in the housing market, where Fannie Mae and Freddie Mac guarantee the majority of new home loans. The two companies, which buy mortgages from lenders and repackage them as securities for investors, were taken over by the government in 2008 when their mortgage-related losses threatened the financial system. So far, the companies have drawn a total of $188 billion in taxpayer aid to stay solvent. "These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if mortgage credit risk was borne solely by private capital," said th e regulator's acting director Edw ard DeMarco.

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