WASHINGTON, Oct. 2 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM) today announced that it would cancel the planned increase in its adverse market delivery charge. The 25-basis point (0.25 percent) increase was scheduled to go into effect for whole loan purchases and mortgage loans delivered into MBS with issue dates on or after November 1, 2008.

'Our expectation is that this decision to forgo the across-the-board increase in our delivery charges will be passed on to borrowers in the form of lower mortgage costs,' said president and CEO Herb Allison. 'The market has changed substantially since we announced this increase to our pricing in early August. We are evaluating all of our risk-management, underwriting guidelines, pricing and costs in light of these changing conditions. As we move forward, we will seek to balance our responsibility to provide the most market support possible with our obligation to protect the company and its many stakeholders, including taxpayers.'

The company said its expectation was that lenders would waive the additional 0.25 percent charge for borrowers who have not yet closed on their mortgage loans.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.

SOURCE Fannie Mae