WASHINGON–A coalition of groups is calling on the Senate to not increase fees on government-backed mortgages in order to offset costs for the highway funding bill. The full Senate Appropriations Committee will be marking up a bill, the Financial Services and Government Appropriations Act for 2016, this morning that if passed could include just such an increase.
In a letter to Senate leadership, the groups, which include CUNA and NAFCU, urge senators to oppose utilizing Fannie Mae's and Freddie Mac's credit risk guarantee fees (g-fees) as a source of funding for the extension of transportation programs.
“Our members were deeply troubled when, in 2011, g-fees were raised by 10 basis points for 10 years to fund a two-month extension of payroll tax relief,” the letter states. “That increase has harmed homebuyers and consumers – and will continue to do so for the duration of the provision’s 10-year lifespan. Since then, whenever Congress has considered using g-fees to cover the cost of programs unrelated to housing, our members have united to emphatically let Congress know that homeownership cannot, and must not, be used as the nation’s piggybank.
The letter goes on to state that “g-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans,” and that “the nation’s housing sector remains in a precarious state. Though we are continuing to see signs of improvement, we must avoid taking any steps that may retard that recovery and ultimately send our overall economy into another tailspin…”
In addition to CUNA and NAFCU, the letter is also signed by the ABA, the American Land Title Association, the Housing Policy Council of the Financial Services Roundtable, Leading Builders of America, Mortgage Bankers Association, National Association of Homebuilders, National Association of REALTORs, and the United States Mortgage Insurers.