MBA, Trade Groups Press House Committee on G-Fees

The Mortgage Bankers Association and other industry trade groups reiterated to the House Rules Committee their strong opposition to use of Fannie Mae/Freddie Mac credit guaranty fees for unrelated budget offsets.  

The committee is charged with drafting rules that will govern House consideration of an upcoming transportation reauthorization legislation; the letter asks that the committee uphold a Fiscal Year 2016 Budget Resolution, which prohibits use of g-fees charged by Fannie Mae and Freddie Mac to be scored as an offset.  

The letter points out that the purpose of the g-fee is to prospectively guard against credit losses at Fannie Mae and Freddie Mac. MBA and the trade groups insist that g-fees should only be used to protect taxpayers from mortgage losses, not to fund unrelated spending.  

“Each time g-fees are extended, increased and diverted for unrelated spending, homeowners are charged more for their mortgages and taxpayers are exposed to additional risk for the long-term,” the letter said. “Using Fannie Mae and Freddie Mac as piggybanks in the transportation reauthorization bill will keep potential homebuyers on the sidelines as it will raise the cost to purchase or refinance a home. This action will disproportionately impact low- and moderate-income borrowers, as well as first-time homebuyers. Also, attempts to increase or extend these fees will make it more difficult to reform our housing finance system.”  

Section 3110 of the Fiscal Year Budget Resolution prohibits the inclusion of revenue from g-fees when calculating offsets for legislation, which MBA and the trade groups said demonstrates that Congress “has already explicitly agreed with our position.”  

“We are united in our belief that using g-fees as a funding mechanism for transportation funding shifts the burden to homeowners and the housing sector in a manner that prevents Fannie Mae and Freddie Mac from effectively managing their risk,” the letter said. “We urge you to uphold the Fiscal Year 2016 Budget Resolution and preserve Members’ ability to lodge points of order against the use of g-fees as an offset in the transportation reauthorization bill.”  

Joining MBA in the letter: the American Land Title Association; the National Association of Home Builders; and the National Association of Realtors.