At the same time the Acting Director of the FHFA is considering loosening guidelines or reducing fees in conjunction with an expanded HARP offering, he’s likely to raise certain fees in 2012.

Speaking at The American Mortgage Conference in Raleigh, NC, Edward Demarco gave some additional clarity on his previous statement on the expansion of the HARP program, saying “Loan level price adjustments, representations and warranties, valuation requirements, and portability of mortgage insurance coverage are among the matters being considered.”

This stood in contrast to the more central message of Demarco’s speech, one that called attention to a languisihing Fannie and Freddie, effectively being on life-support.  “It ought to be clear to everyone at this point that the Enterprises will not be able to earn their way back to a condition that allows them to emerge from conservatorship.” So naturally, when Demarco says he’d “anticipate the Enterprises will continue the gradual process of increasing guarantee fees,” it must be due to bringing the GSEs in line with what might be expected from private market solutions that must inevitably replace the the dying agencies: “current pricing for credit guarantees is less than one would likely observe in a purely private, competitive market.”

Despite the planned increases to G-Fees, Demarco points out “such increases should not undermine [efforts] to bring stability to housing and housing finance.”

Read the full speech here.