We all have a different definition of fun.  For me, it's taking the weekend to do some light reading.  Specifically, Freddie Mac's 1,394-page filing with the SEC. 

Hold your laughter -- mortgage market insight is a major reason why my clients love to have me on their side.

The SEC document itself is kind of a bear so let's just skip to page 72 and read the part that matters to the average, everyday American home buyer and homeowner. 

From Freddie Mac:

"We expect to continue to pursue increases to our management and guarantee fees and delivery fees on bulk and flow transactions to better reflect our expectations of future default costs."

Now, if that passage confuses you, don't be upset.  It's written to confuse you.

See, there's a good reason why SEC filings don't read like Goodnight Moon.  Companies often prefer to obfuscate, especially when reporting financial stability to the SEC.  As a result, SEC filings are written in a language that rivals leetspeak -- if you're not on the inside, you have no idea what you're looking at. 

So, allow me to translate.  In English, the passage from Freddie Mac's SEC filing reads:

"To pad our bottom-line against foreclosures, we plan to increase loan-level fees for all conforming borrowers."

Loan-level fees, you'll remember, are mandatory charges on a mortgage.  Not closing costs, per se, but an interest rate adjustment to every mortgage application. 

In this sense, Freddie Mac's plan to add new loan-level pricing adjustments is like a tax on borrowing and would mark the third round of such fees since loan-level pricing adjustments were first introduced December 2007.

Mortgage rates used to based on the price of mortgage bonds alone.  Today, it's bond prices plus fees from Freddie (and Fannie).  In other words, even if Wall Street mortgage rates fall later this year, Main Street mortgage rates could still rise because of new, mandatory borrowing fees for all mortgage applicants.

Therefore, as we've talked about before, if you're in the market for a new mortgage, time is not your friend.  The longer you wait -- all things equal -- the more likely you'll pay a higher interest rate to borrow money.

Especially if mortgage defaults rise.

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Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.