The FHFA this month announced it would increase guarantee fees by an average of 11 basis points. But newly-confirmed incoming FHFA director Mel Watt has said he will delay the increase, Reuters has reported.
Watt is due to be sworn into office on January 6, and said in an email he would announce upon taking the reins of the agency that he would delay guarantee fee increases "until such time as I have had the opportunity to evaluate fully the rationale for the plan and the plan's impact".
The fee increase, originally slated for March and April, was planned as part of an ongoing bid to lure private capital back into the mortgage market.
“The new pricing continues the gradual progression towards more market-based prices, closer to the pricing one might expect to see if mortgage credit risk was borne solely by private capital,” FHFA Acting Director Edward J. DeMarco said at the time. “The price changes provide better protection of and return to taxpayers, who are providing the capital support that keeps these companies operating. These changes should encourage further return of private capital to the mortgage market.”
Incoming FHFA director Mel Watt has announced he will delay the hike in Fannie and Freddie guarantee fees.