Released: August 17, 2008

Fannie, Freddie will raise some fees, lower others

Source: Kenneth R. Harney, Los Angeles Times (Free Registration)

The two biggest sources of mortgages for American home buyers plan to raise their base fees to counter what they see as continuing “adverse conditions” in the real estate marketplace.

At the same time, however, Fannie Mae and Freddie Mac—which currently fund more than three-quarters of all new home loans - also plan to selectively reduce fees for applicants whose likelihood of default and foreclosure appear to be lower than the companies’ previous estimates.

The changes are being driven by what’s known as risk-based pricing. Factors such as your credit score, the size of your down payment and the type of loan you seek can push your expenses on a new mortgage up or down significantly—a difference of tens of thousands of dollars over the term of the loan.

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