By charging a 20-basis-point guarantee fee, Fannie Mae and Freddie Mac are probably achieving a 26% return on equity, according to an estimate by a Mortgage Bankers Association economist."I don't know what the [ROE] target is," MBA economist Jay Brinkman told an American Enterprise Institute seminar on the "g-fees" the two government-sponsored enterprises charge lenders. He estimated that a 12.4-bps g-fee would produce a 15% ROE. However, the GSEs are able to charge higher g-fees because of the lack of competition in conventional conforming mortgages and a lack of transparency in the fees they charge, he said. He stressed that the pricing of g-fees is driven more by capital requirements than by credit losses. In fact, the MBA became concerned when the Office of Federal Housing Enterprise Oversight imposed a 30% capital surcharge on the GSEs as a result of their accounting problems. "G-fees are so sensitive to required capital, we did not want OFHEO to impose a capital provision," Mr. Brinkman said. The MBA can be found online at http://www.mortgagebankers.org.
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Doxo plans to fight the FTC complaint, which focuses broadly on consumer finance, but there are signs of confusion about the company's role in mortgages too.
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Members of the LGBTQ community were most likely to have experienced housing bias, according to a Zillow survey, which also found many people don't recognize how fair lending laws could help.
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Senior executives making over $151,000 would still be subject to such clauses should the rule go into effect this year.
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Christopher J. Gallo and his aide, Mehmet A. Elmas, allegedly withheld information in mortgage applications, hiding that borrowers were purchasing second home properties.
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Mortgage rates rose 7 basis points this week, Freddie Mac said, and more increases are likely following a weaker than expected gross domestic product report.
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Independent mortgage bankers lost the most money ever on every loan originated last year due to higher rates and lower volumes, an industry trade group said.
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