US Regulator to Seek Higher Mortgage Fees, Risk-sharing
The federal regulator in charge of Fannie Mae and Freddie Mac said that he is considering some policy reforms in two of the biggest mortgage firms in the United States – which includes raising mortgage costs and risk-sharing with the private sector.
The Federal Housing Finance Agency (FHFA) on Monday said it is considering some policy reforms in two of the biggest mortgage firms in the United States – which includes raising mortgage costs and risk-sharing with the private sector.
Edward DeMarco, FHFA acting director, said he is seriously considering various reforms for Fannie Mae and Freddie Mac to less the long-term exposure to risk for the government-backed mortgage firms.
“It will be a series of periodic, gradual prices increases, which makes more sense than two large price adjustments,” DeMarco said during his speech at a conference sponsored by the North Carolina Mortgage Finance Agency.
DeMarco also said the raise in mortgage cost will not happen any time soon, but could be implemented by next year.
Aside from higher mortgage cost, federal regulators also want to expand the use of mortgage insurance and securities structure that would eventually allow risk-sharing with the private sector.
At present, Fannie and Freddie has cost taxpayers more than $140 billion in combined bailout package provided by the US government. It will be recalled that the two mortgage firms declared bankruptcy protection after failing to manage its finances amid the global economic downturn.
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