Ginnie Fee Hike Resurrected?

An increase in the Ginnie Mae guarantee fee continues to be a threat as House and Senate conferees decide on ways to pay for the Higher Education Act (H.R. 6).The Senate version contains the infamous 3-basis-point fee increase that had been considered and dropped from the highway bill and the VA-HUD appropriations bill. This time the education committees are looking for $600 million to cover the costs of subsidizing interest rates on student loans. Increasing the Ginnie Mae fee from 6 bp to 9 bp could raise $200 million over five years. Strangely enough, the Ginnie Mae fee increase would not go into effect for four years, until Oct. 1, 2002. But in the search for revenues the House/Senate conferees could move the effective date to Oct. 1, 1998. If that can't be done, the conferees can always follow the advice of the Mortgage Insurance Companies of America and increase the Ginnie Mae fee by 6 bp. The decisions are expected to be made shortly after Labor Day.