True Stories: Hybrid, eNote and RON Implementation

Join expert panelists that will discuss the status of federal legislation, trends in digital adoption and how best to prepare your organization for the next generation of lending processes.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

Top CFPB official “hates” QM rules, jeopardizing safe harbor

A top CFPB official in charge of the rule-making process has heavily criticized the agency's own qualifying mortgage rule, jeopardizing safe harbor.

Don’t sleep on non-QM products

Now is the perfect time for originators to consider expanding to non-QM products – to grow business, diversify their offerings and to ensure an opportunity to better serve their customers.

Mortgage

New legislation would permanently bar using Fannie, Freddie g-fees for federal spending

New bill would extend moratorium into perpetuity

For much of last year, Congress engaged in a fight over the potential use of funds raised from Fannie Mae and Freddie Mac’s guarantee fees to cover federal spending.

Specifically, the use of g-fee funds to pay for a portion of a massive transportation bill was the subject of significant debate and several Congressional maneuvers, eventually leading to the removal of a controversial “pay-for” — the mechanism which funds the bill — that would have significantly delayed scheduled cuts in g-fees.

Now, new legislation introduced this week in the House of Representatives would ensure that a fight over the use of g-fees to fund federal spending will never happen, by permanently banning the use of g-fees as budgetary offsets.

Rep. Mark Sanford, R-SC, introduced the bill, called H.R. 4893 or the Risk Management and Homeowner Stability Act of 2016, earlier this week, along with Rep. Brad Sherman, D-CA, and Rep. Randy Neugebauer, R-TX.

The bill would amend the Congressional Budget and Impoundment Control Act of 1974 to prohibit the use of guarantee fees as budgetary offsets.

The bill isn’t the first time that legislators have tried to end the practice of using g-fees for federal spending.

Last year, Sen. Mike Crapo, R-Idaho, and Sen. Mark Warner, D-Va., introduced a budget point of order that would prevent g-fees from being used to offset federal spending, a practice the Senators call a “budgetary gimmick” and a “back door tax” on homeowners.

In a release, Sanford’s office shared a similar viewpoint as the impetus for this bill.

 “This bill simply ensures that guarantee fees cannot be used as a budgetary offset outside of their intended purpose – to provide stability for the mortgage market,” Sanford’s office.

“Using g-fees to fund unrelated programs weighs down homeowners with an unnecessary burden and prevents Fannie Mae and Freddie Mac from appropriately managing risk,” Sanford’s office continued.

“Plus, using g-fees to offset spending creates an incentive to set the fees based on the need for new spending instead of the true cost of capital,” Sanford’s office concluded. “Homeowners shouldn’t be used as a national piggy-bank, and this bill will make sure that g-fees are used as they were intended.”

Most Popular Articles

Volume-hungry mortgage lenders loosen credit standards

Mortgage credit availability loosened up in April by 2.2%, per the MBA. The drivers were in conventional mortgages and GSE programs for ARMs and high-balance loans.

May 11, 2021 By

Latest Articles

Genworth mortgage insurance arm IPO on ice

Genworth Financial said it will delay the initial public offering of its recently rebranded mortgage insurance arm, Enact Holdings.

May 13, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please