Freddie Mac, in a bid to boost its share of the market, has sharply cut its processing fees for Real Estate Mortgage Investment Conduits, market sources said.
A spokesman for Freddie Mac declined to comment on reports that it had cut the fees charged to investment banks to $30,000 from $150,000 on Remic transactions of $500 million or greater.
"Freddie Mac has been trying various strategies to get gold pass- throughs to be priced more fairly (than) comparable Fannie Mae's," said Arthur Q. Frank, senior vice president mortgage research for HSBC Securities Inc., referring to Freddie Mac's bigger rival secondary mortgage agency. "This appears to be another attempt to increase the demand for gold pass-throughs relative to Fannie Mae's."
"Dealers now have a financial incentive to do Freddie Mac Remics rather than Fannie Mae Remics," one observer said.
A spokesman for Fannie Mae declined to comment on its fee structure.