Mortgage Cooperative Wants End to Volume Discounts

Lenders One, the largest mortgage cooperative in the U.S., is calling for the Federal Housing Finance Agency to end volume discounts on Fannie Mae and Freddie Mac’s guarantee fees.

“Right now there is a g-fee disparity,” said Lenders One chief executive Scott Stern. “This puts small and medium sized lenders at a competitive disadvantage.”

Early last week acting FHFA director Edward DeMarco hinted that he would like to end volume discounts which are given by the GSEs to their largest seller/servicers. 

Although DeMarco touched on the topic of volume discounts he did not explicitly say the agency will kill this benefit which is enjoyed by such mega lenders as Wells Fargo, Bank of America, and JPMorgan Chase, among others.

In a follow up inquiry placed to FHFA by National Mortgage News, a spokeswoman for the agency declined to expand on the director’s comments.

The 10 largest customers of Fannie and Freddie paid an average g-fee of 23 basis points in 2010, but seller/servicers ranked 11 through 90 paid 27bps.

Based in St. Louis, Lenders One has 185 members. If ranked as one, it would be the nation’s fifth largest residential funder. (For a further analysis on the issue see the weekly edition of NMN.)

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Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_440/coop-wants-end-volume-discounts-1026723-1.html

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