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Adverse market fee fueled g-fee profitability in 2021

Fannie Mae and Freddie Mac purchased a record $2.52 trillion in single-family loans in 2021, with the average guarantee fee — expected to cover credit losses, administrative costs and cost of capital — rising 2 basis points from the prior year to 56 bps.

That uptick is largely thanks to the controversial 50 bps “adverse market fee” applied starting in late 2020, which originators railed against and was ultimately discontinued in July 2021.

According to the Federal Housing Finance Agency‘s annual report on guarantee fees, the average upfront g-fee details ⇒

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