Pressure from housing groups this week succeeded in thwarting a Senate amendment to a transportation bill that would have raised guarantee fees on Fannie Mae/Freddie Mac loans to pay for Gulf Coast reclamation projects.
The amendment by Senators Bill Nelson, D-Fla., and Richard Shelby, R-Ala., would have raised the g-fee by 7.5 basis points for one year.
In December, Congress raised the g-fee on GSE loans by 10 bps for 10 years. The Nelson/Shelby 7.5-bp fee would have gone into effect after the 10th year.
The amendment was revised Wednesday's evening and the G-fee hike was replaced with another revenue raising provision, according to a spokesman for Sen. Shelby.
The Mortgage Bankers Association, National Association of Home Builders, and National Association of Realtors learned of the g-fee provision Wednesday afternoon and urged the Senate to reject it.
Housing should not be used as the "nation's piggybank" to pay for the restoration of beaches or other government projects, according to the trade groups.
"Increasing g-fees for other purposes – even just extending the current fee increase by one year at a lower rate – effectively taxes potential homebuyers and consumers looking to refinance their mortgages," the three associations say in a joint letter.
