Mortgage companies that favor slashing the Fannie Mae/Freddie Mac minimum servicing fee will look to "alternative" measures to help manage their housing receivables if the two GSEs don't make a change, according to the Mortgage Bankers Association.In a new report that discusses the pros and cons of slashing the fee, the MBA says that among its members there "has been little discussion" about a compromise over the issue. In February, the MBA held a private, members-only forum on whether the government-sponsored enterprises should cut the minimum servicing fee from the current 25 basis points to 12.5 bps. Seller/servicers that favor a cut say they would save millions of dollars a year in hedging costs if more of the servicing "strip" were allowed to be sold into the secondary market. Those who want to maintain the status quo have cited expensive servicing technology maintenance costs that need to be recouped, loan buyback concerns, and compliance costs, among other reasons. Fannie and Freddie are considering reducing the minimum servicing fee, but no action is imminent, industry sources have told MortgageWire.
