MBA, Trade Groups Endorse G-Fee Bill

The Mortgage Bankers Association led a joint letter with more than a dozen other industry trade groups endorsing a House bill that would prohibit use of Fannie Mae and Freddie Mac guarantee fees to pay for unrelated government spending.

H.R. 916, the Risk Management and Homeowner Stability Act (, was recently reintroduced by Reps. Mark Sanford, R-S.C., and Brad Sherman, D-Calif. The bill specifically prohibits congressional budget committees from counting increases to guarantee fees as offsets for budget enforcement purposes. The bill includes an exception for legislation that increases guarantee fees to finance reforms to the secondary mortgage market.

“This bill simply ensures that guarantee fees can’t be used as a budgetary offset outside of their intended purpose, which is to provide stability for the mortgage market,” Sanford said.

The joint trade letter ( 23 2017 HR 916 g-fee joint trade letter of support.pdf) noted by preventing g-fees from being scored as a funding offset, H.R. 916 gives lawmakers a “vital tool” to prevent homeowners from footing the bill for unrelated spending.

“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from loans that default,” the letter said. “Increasing g-fees for other purposes imposes an unjustified burden on homeowners who would pay for any increase through higher monthly payments for the life of their loan.”

In 2011, Congress increased g-fees for 10 years in order to pay for a payroll tax cut for two months. In recent years, MBA has led industry efforts to prevent Congress from appropriating g-fees for other budgetary purposes.

“Our organizations were deeply troubled when g-fees were raised back in 2011 to fund a two-month extension of payroll tax relief–a tax that homebuyers and owners will continue to pay until 2021,” the letter said. “Since then, whenever Congress has considered using g-fees to cover the cost of programs unrelated to housing, we’ve informed lawmakers that homeownership cannot, and must not, be used as the nation’s piggybank.”

Additionally more than 2,000 members of the MBA Mortgage Action Alliance have contacted their representatives in support of the bill through a Call to Action issued last week (

Joining MBA in the letter: the American Bankers Association; American Land Title Association; Community Mortgage Lenders of America; Consumer Mortgage Coalition; Credit Union National Association; Habitat for Humanity International; Housing Policy Council of the Financial Services Roundtable; Independent Community Bankers of America; Leading Builders of America; National Association of Federal Credit Unions; National Association of Home Builders; National Association of Realtors; and U.S. Mortgage Insurers.