The House of Representatives passed an immigration bill on Friday that uses Fannie Mae and Freddie Mac loan guarantee fees to pay for the new visa program.
Mortgage industry and consumer groups objected to the use of g-fees for such a non-mortgage-related program. But the House passed the bill by a 245-139 vote. The vote may purely be symbolic, however, because the Senate is unlikely to pass the measure.
The immigration bill (H.R. 6429) would provide visas for foreign students that graduate from American universities with advanced degrees and want to stay in the U.S. The bill is a product of the House Judiciary Committee.
House Financial Services Committee chairman Spencer Bachus, R-Ala., and soon-to-be chairman Jeb Hensarling, R-Texas, voted for the immigration bill.
The Texas congressman said the inclusion of the guarantee fee provision in the bill “made it a very difficult vote. Moving forward, I am committed to ensuring that any future guarantee fee increases are not misdirected.”
Hensarling will replace Bachus as the Financial Services Committee chairman early next year.
The in-coming chairman noted that he supports guarantee fee increases to allow the private sector to compete with the GSEs. However, “directing these fees to unrelated spending is bad policy,” Hensarling said in a statement.
Fannie and Freddie are in conservatorship and owe the U.S. Treasury $140 billion.
In December 2011, Congress passed a payroll tax relief bill and paid for it by hiking Fannie and Freddie g-fees by 10 basis points over 10 years. H.R. 6429 would extend the 10-bp g-fee hike for another year to pay for the visa program.
The immigration bill now goes to the Senate, which is unlikely to act on the measure before the end of December, when the current two-year congressional session comes to an end.
That means the House sponsors will have to go back to square one in January and start the legislation process all over again.
Consumers pay the loan guarantee fees. Lenders generally roll g-fees in the interest rate, which the homeowner pays over the life of the loan. A 10-bp g-fee can add up to $4,000 over 30 years on a $200,000 mortgage, according to the Mortgage Bankers Association.