Inside Mortgage Finance is today reporting that FHFA has instructed both Fannie and Freddie to price g-fees at no less than 44 bps for 30 year mortgages. Freddie is said to have granted lower g-fees to only a few originators, but these could well be the few very big ones critical to Freddie’s purchase stream and essential for continued PC liquidity. Without a g-fee edge over Fannie, Freddie’s ability to pull back as the common RMBS advances is reduced and the discounts it has granted to subsidize risk-share deals is also constrained.
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