MBA, Trade Groups Press House on GSE Bill

The Mortgage Bankers Association and other industry trade groups sent a letter to House leadership, urging support for a bill that would restrict congressional appropriations involving Fannie Mae and Freddie Mac.  

The bill, S. 2038, the Jumpstart GSE Reform Act (https://www.congress.gov/bill/114th-congress/senate-bill/2038), introduced by Sen. Bob Corker, R-Tenn., would prohibit sale of Treasury-owned senior preferred shares in Fannie Mae and Freddie Mac without congressional approval; and also prohibit any increase in GSE guarantee fees (g-fees) from offsetting other government spending.  

“Our organizations have a long-standing interest in congressional efforts to reform Fannie Mae and Freddie Mac,” the letter said. “While much work remains on this front, prohibiting Treasury from selling their shares of senior preferred stock in the GSEs will ensure that Congress has the final say in any comprehensive housing finance reform plan. With taxpayers currently backstopping the U.S. housing finance system, the GSEs should not be allowed to recapitalize without congressionally approved reforms in place.”  

MBA, the National Association of Home Builders and the National Association of Realtors added that S. 2038 would ensure that Congress cannot use Fannie Mae and Freddie Mac g-fees as a revenue offset for government spending.

“Our organizations strongly believe that g-fees should only be utilized for their intended purpose–to guard against credit losses by the GSEs themselves,” the letter said. “Utilizing g-fees for any other purpose serves only as a ‘tax on homeownership’ in the form of higher payments, and is counterproductive to congressional housing finance reform efforts.”