Fannie Cuts ARM Fee

Fannie Mae has announced that it will reduce its minimum servicing fee on adjustable-rate mortgages to 25 basis points starting Jan. 1.The secondary-market agency also indicated that it may be willing to cut the minimum ARM servicing fee to 12.5 bps for high-quality servicers. "On a negotiated basis, the minimum servicing fee on certain adjustable rate mortgages may be reduced to a level below 25 bp," according to Fannie announcement 05-08. Fannie currently requires a minimum servicing fee of 37.5 bps on most ARMs. The 12.5 bps minimum servicing fee on uniform hybrid ARMs will remain in effect for 2006.