Mortgage bankers are bracing for more
Back in the spring pressure from lending and housing groups succeeded in thwarting a Senate amendment to a transportation bill that would have raised g-fees on Fannie/Freddie loans to pay for Gulf Coast reclamation projects.
And late last week—a day after the Federal Housing Finance Agency announced that more guarantee-fee hikes were 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.
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.
The National Association of Realtors, not surprisingly, also opposes the use of g-fees in relation to STEM. In a letter to Congress, NAR president Gary Thomas says, “The unintended impact of your proposed g-fee increase would be to keep housing consumers on the sideline...”
G-fees are charged by Fannie and Freddie to their seller/servicers but the ultimate cost is paid by mortgagors.
Both GSEs 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 seller-servicers have already been hit with two g-fee hikes in the past seven months.
