Fannie Fees Fail to Offset Record Low Lending Rates: Mortgages

Ben S. Bernanke’s success in pushing mortgage rates to record lows is enabling Congress to fund last month’s payroll tax cut extension by siphoning money from Fannie Mae and Freddie Mac, while homebuyers still benefit from the cheapest borrowing costs in history.

The legislation mandated that Fannie Mae, Freddie Mac and the Federal Housing Administration charge more to guarantee home-loan debt, starting with an increase of 0.1 percentage point at Fannie Mae and Freddie Mac in April. It will force further increases of as much as 0.45 percentage point over the next two years at the two U.S.-supported companies, according to Nomura Securities.