Is the government just using homeowners, mortgage industry?

It’s true the mortgage industry has seen brighter days. After all, giving mortgages to anyone who can breath and stand up straight turned out to be a bad idea for players who are no longer in the market.
But when will homeowners catch on to the fact that members of Congress – even years after the housing crisis – continue to use mortgage finance and homeowners as an escape route for every mistake, or hidden tax that U.S. representatives like to throw at homeowners and borrowers.
Rob Chrisman, a blogger who covers the industry, describes Congress’ latest insult to mortgage holders in his latest blog. He cites a quote from an industry professional who is steamed at Congress for simultaneously arguing about bringing private capital back into the market, while still using g-fees to fund other non-housing related projects.

“I think it’s high time for the main stream media press to start to sit up and take notice about just how much the government is taking (taxing?) borrowers in the form of ‘g-fees’,” Chrisman quotes the industry rep as saying.  “This is a term that we in the industry know very well, but how many folks on Main Street truly understand that the ‘g-fee’ is the same as monthly fees paid to the government, via FNMA and FHLMC, straight from their mortgage?

The term has become political camouflage – Congress has hit on it as a way to silently tax borrowers, and many under-informed members of congress are even tempted to write legislation that uses g-fees to pay for non-related government programs, which in turn would have the intended consequence of silently taxing one group for the direct subsidization of another.”

Case in point, the MBA earlier this year had to inform members of Congress that it would not be sensible to extend hikes on g-fees beyond a 10-year stretch to cover expenses tied to a work visa program for immigrants.

What do immigrants have to do with mortgages? Nothing. But if measures like this go unchallenged, U.S. mortgage holders will essentially be paying for new immigrants to get visas with Congress hiding behind g-fees. Should we give them are jobs too, Congress?

Talk about a bunch of Brutuses. And yet,  these are the representatives who say they want Fannie Mae and Freddie Mac gone…

HousingWire’s Brena Swanson uncovered another hidden “rob Peter to pay Paul” moment this week when she released a report, saying a member of Congress wants to adjust the mortgage interest tax deduction for certain homeowners to save money. Okay, well that’s in line with other plans to reduce the budget deficit.

But, in this case, the proposed bill would use savings from proposed changes to the MI deduction plan to cover affordable housing for other homeowners and renters. Essentially, it would hit one group to help another.

Yes, these are the solutions coming out of Congress. It’s no wonder five years after the bubble burst, the market continues to flounder.

While banks were a problem, there’s another likely answer to today’s economic malaise. Essentially, America has a bad Congress. They set up trade imbalances, rob one group to pay another and have focused on shifting money rather than creating wealth or a healthy country. Their talk is cheap.

It’s time for Americans wake up.


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