WASHINGTON - In a move that will boost secondary mortgage market sales, Fannie Mae said it will not add a new surcharge on mortgages it buys in some of the weakest housing markets, as it planned to do on Nov. 1.
Fannie had planned to implement the new 0.25% point fee on loans issued on or after Nov. 1 in regions where home values are slipping and defaults are high. The extra fee was planned as a way to boost the company's earnings and reserve capital. Freddie Mac, which also plans a Nov. 1 fee, is expected to follow suit and scrap its surcharge.
Both companies were taken over by the Federal government last month and are being run under conservatorship.
The elimination of the fees is expected to make secondary market sales of mortgages for credit unions and banks more attractive, and lower borrowing costs for homeowners.(c) 2008 Credit Union Journal and SourceMedia, Inc. All Rights Reserved.http://www.cujournal.com/ http://www.sourcemedia.com/
