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Ronald D. Orol
WASHINGTON (MarketWatch) – In an attempt to reduce the government’s role in housing finance, the nation’s regulator for Fannie Mae and Freddie Mac announced Friday that it is raising the fees that the two government-seized housing giants charge for guaranteeing credit risk. Edward DeMarco, acting director for the Federal Housing Finance Agency, said the agency has directed Fannie Mae and Freddie Mac to raise the guarantee fees it charges on single-family mortgages by an average of 10 basis points. The changes to the guarantee fee pricing “represent a step toward encouraging greater participation in the mortgage market by private firms,” said DeMarco. According to a report released by the regulator, the average guarantee fee charged by the two mortgage giants increased from 26 basis points in 2010 to 28 basis points in 2011. The fee hike will take effect Nov. 1 or Dec. 1 depending on the structure of the loan.
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Fannie, Freddie to hike mortgage guarantee