Freddie Prices Risk into G-Fee

Freddie Mac seller/servicers delivering high-risk mortgages to the GSE could wind up paying guarantee and delivery fees of close to 78 basis points per loan under new requirements that go into effect in three months.

Up until the credit crisis, which began last August, the average "g-fee" for Freddie Mac loans was 23 basis points. (G-fees can vary from lender to lender, depending on "strategic alliance" deals they might have with Freddie.)

In December, according to a report in this newspaper, both Freddie Mac and Fannie Mae also tacked on a 25 basis point delivery fee on top of the standard g-fee.

It's anticipated that any increase in charges will be passed on to the consumer.

Come June 1, Freddie will charge an additional delivery fee of 30 basis points if the mortgage has a loan-to-value ratio greater than 80% and a FICO score of under 740. When all is said and done, some seller/servicers could be paying at least 78 basis points to the GSE.

A company spokesman confirmed the g-fee and delivery charges but noted that some of its lender clients might receive "credits" which might reduce their burden. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/

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