Fannie Mae and Freddie Mac would make annual contributions to an affordable housing fund based on their outstanding book of business, rather than their profits, according to a GSE regulatory bill introduced by House Financial Services Committee chairman Barney Frank, D-Mass.Rep. Frank chose this approach to address objections raised by the Bush Administration, but it also has the Mortgage Bankers Association's support. "This approach will make it more difficult for the GSEs to pass the costs of their contributions onto mortgage lenders and consumers," MBA chairman John Robbins told members of the committee at a March 12 hearing. Under the bill, the two government-sponsored enterprises would be assessed an 1.2 basis point fee on their outstanding mortgage portfolios, as well as Fannie- and Freddie-issued mortgage-backed securities that are owned by other investors. Originally, the GSE AH fund assessment was based on profits, but administration officials objected, claiming it would encourage the GSEs to grow their portfolios and it looked too much like a "tax." The new GSE regulator would be responsible for managing the AH fund and distributing the grants under the Frank bill, not Fannie or Freddie.

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