Fannie Mae-No Politics (FNMA)

[Wise Man]

I will rephrase the part of Deferred Income in the prior post, with regard to the upfront g-fee that should have been renamed "Delivery fee":

(the ones that pay this fee, the banks, aren't the beneficiaries of the guaranty service)

Because that applies for the small lenders and non-banks that usually sell the loans to FnF for cash.
But, in the case of large banks, they usually sell the loans in exchange for a MBS.
Then, we must say that, although the banks pay the formerly known as "upfront g-fee", they pass on the increased costs to borrowers, in the form of higher annual mortgage rate.
There you are, the borrowers that ultimately pay this fee aren't the beneficiaries of the Guaranty service that makes the MBS whole. In other words, using FASB wording, no transfer of Guaranty service over time, no Performance Obligation, no promise.
The borrowers pay this Delivery fee to have access to the guarantor's organization, and they get lower 30-year mortgage rates as a result.
The ultimate goal is the amortization into earnings of the Deferred Income (accumulated upfront g-fee) in one fell swoop.
Finally, this is the reason why the FHFA asked in the recent RFI on pricing, whether the upfront g-fee (LLPA) should even exist at all. It aims to prevent this idea of amortization of Deferred Income from happening and FnF enjoying this upfront payment (Core Capital) on day one.
And, once again, the FHFA shows the ill-intent of inflicting economic harm on the shareholders.