Bachus proposes raising g-fees, slashing foreclosure programs
Rep. Spencer Bachus (R-Ala.) urged the recently formed super committee to raise more revenue from the government-sponsored enterprises and slash spending to an array of foreclosure prevention programs in order to reduce the national debt.
The super committee was formed by Congress earlier this year to find at least $1.2 trillion in long-term government savings, to ease the nation's debt burden. In a letter sent last week, Bachus and other lawmakers on the House Financial Services Committee, proposed Fannie Mae and Freddie Mac raise the guarantee fee they charge lenders even higher than the 10 basis point increase the Obama administration planned.
The planned raise would cut costs to the government by $28 billion over 10 years, but Bachus said this wasn't enough.
"Even if this increase were adopted, g-fees would still remain significantly lower than fees typically charged by private-label securitizers of residential mortgages," Bachus wrote.
He asked the super committee to consider a bill introduced by Rep. Randy Neugebauer (R-Texas) earlier in the year that would gradually increase the g-fees to a fair market value over the next two years.
Bachus also recommended the committee cut funding for a variety of foreclosure prevention programs. He proposed ending the Home Affordable Modification Program early, which is set to expire at the end of 2012. Under HAMP, more than 816,000 borrowers received a permanent modification, which will still fall short of the 3 million to 4 million originally estimated.
The proposals also included cuts to the struggling Federal Housing Administration Short Refi program, the remaining unspent money for the Neighborhood Stabilization Program, various public housing operations under the Department of Housing and Urban Development and appropriations for the housing counselor organization NeighborWorks.
Bachus ended the letter with another call to repeal several provisions under the Dodd-Frank Act, pointing to faulty government housing policies rather than out-of-control Wall Street leveraging as the cause of the real estate bubble and the resulting financial crisis.
"The most significant impediment to economic growth that falls within the Financial Services Committee's jurisdiction is the Dodd-Frank Act," Bachus said.
In a briefing with journalists Monday, White House Press Secretary Jay Carney said the Obama administration would not support any efforts from Republicans to scale back Dodd-Frank reforms.
"It's just inconceivable to us that an economic plan for the future would contain within it the elimination of reforms that would prevent the kind of financial sector collapse that we saw that created the greatest recession since the Great Depression," Carney said. "Just doesn’t make sense to us. Doesn’t make sense to the president."
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