G-Fee to Increase Mortgage Cost
Fannie Mae and Freddie Mac Increase Mortgage Fees April 2012
G-Fee – Fannie Mae and Freddie Mac, will raise fees by at least 10 basis points effective April 2012, due to the passage of the two month payroll tax cut extension.
The Federal Housing Finance Agency will raise guarantee fees on single family mortgage back securities by government sponsored by enterprises by 10 basis points to help fund the payroll tax cut passed by Congress. FHFA will evaluate whether it will increase the G-Fee in early 2012, and over the next two years.
As of now, we have already seen an implemented increase of 50 to 65 basis points from some lenders due to the increased guarantee fee (G-Fee).
The G-Fee will remain in effect through October 2021, and could mean an extra $4,000 in fees on a $200,000 loan amount.
Interesting subject. Colorado’s last legislative session passed a new Probate Compensation statute which, in part, deals with this issue. Colorado had a long standing Supreme Court ruling that you couldn’t have contingency fees in probate cases. The new statute overrides that case. But, even under the new statute, the reasonableness of the fee is still the crux of the issue. The subject to Rule 1.5 of the Rules of Professional Conduct, suggests even where there is a written fee agreement, a reasonableness standard applies.