MBA: Dont Use Fannie/Freddie G-Fees to Pay for Immigration Reform
A day after the Federal Housing Finance Agency announced that more guarantee-fee hikes are on the way, the president of the nation’s largest mortgage trade group said he is asking Congress to prevent using g-fee money to pay for “unrelated policy items,” including immigration.
In a press statement, David Stevens, president of the Mortgage Bankers Association, said the industry is asking “Congress to reconsider the approach of using guarantee fees for anything other than their intended purpose. Increasing the cost of most mortgages will only add to the uncertainty that is plaguing the mortgage market and holding back a more a robust housing recovery.”
H.R. 6429, also known as the “STEM Job Act of 2012,” addresses immigration reform, but uses GSE money to pay for part of it. In particular, STEM aims to create high-paying manufacturing and research jobs in the U.S. by establishing a new green card program for advanced degrees in science, technology, engineering and mathematics. It has the support of the U.S. Chamber of Commerce.
G-fees are charged by Fannie Mae and Freddie Mac to their seller/servicers but the ultimate cost is paid by mortgagors.
Both have been in conservatorship since September 2008 but are now earning money—cash that goes directly into the U.S. Treasury.
Fannie Mae/Freddie Mac servicers have already been hit with two guarantee-fee increases in the past seven months.
MBA notes g-fees “are supposed to be used to help offset the risk inherent in providing mortgages, and any increases to those fees should be used for that purpose. Dipping back into the housing piggybank to pay for unrelated policy items on the backs of America’s homebuyers sends the wrong message at a time when the housing market is starting to show signs of recovery.”