Freddie Cuts Minimum ARM Servicing Fee

Freddie Mac has established an across-the-board minimum servicing fee of 25 basis points on its adjustable-rate mortgage products.Previously, the servicing fee minimum on some ARM products -- including balloons and one- and three-year ARMs -- was 37.5 bps. The reduction of the minimum servicing fee to 25 bps will enable Freddie Mac seller/servicers to pass on more of the coupon yield to investors, reducing their need to capitalize servicing rights. "It adds flexibility," said a Freddie Mac spokeswoman. In an unrelated matter, Freddie Mac's loan purchases fell to $33.8 billion in February, compared with $36.9 billion the month before. The company's retained portfolio fell to $637.0 billion from $639.6 billion the previous month.