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On April 17, 2015, the Federal Housing Finance Agency announced its review of guarantee fees and loan level pricing adjustments [LLPAs or upfront fees] charged by Fannie Mae and Freddie Mac as well as capital requirements for mortgage insurance companies.
FHFA made minor changes to GSE fees that will have only minor impact to borrowers. Though NAR was pleased with the FHFA's elimination of the 25-basis-point adverse market delivery fee, NAR commented that the continuation of the high fees were questionable and unnecessary to protect against against risk. The fees are pushing more borrowers to FHA loans and keeping the GSEs from serving a broader market [as reflected in high credit scores].
The new mortgage insurer capital requirement may increase costs for mortgage insurance. However, banks and MI companies are advocating for pilot programs to include MI on loans to borrowers with more than 20% down. The tradeoff would be reduced guarantee fees to the GSEs. It is conceivable that this type of risk sharing also may increase prices to borrowers with less than 20% down. NAR has discussed piloting alternatives such providing deeper MI coverage on loans that already require mortgage insurance [less than 20% down] in exchange for reduced fees from the GSEs.