Fannie Mae and Freddie Mac guarantee fees (g-fees) should not be used as a source of funding offsets in the bipartisan infrastructure framework being negotiated in the Senate, CUNA and other organizations wrote to Sens. Kyrsten Sinema (D-Ariz.) and Rob Portman (R-Ohio) Thursday.
Fannie and Freddie Mac charge lenders g-fees, primarily to protect against credit-related losses in the mortgages they back. Those fees were raised by 10 basis points in 2011 to fund a two-month extension of a payroll tax cut.
“As representatives of institutions that span the entire housing finance ecosystem, we firmly believe that g-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses and to support the GSEs’ charter duties,” the letter reads. “[The 10 basis point] increase harmed homebuyers by raising the cost of homeownership in all parts of the country – and continues to do so during the provision’s decade-long lifespan, which expires in September.”
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