MBA Criticizes Improper Use of Potential G-Fee Extension

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

David Stevens, CEO of the Mortgage Bankers Association (MBA), is counteracting a proposal from the House of Representatives to prolong g-fee increases on government-backed mortgages to compensate for the costs of passing an immigration bill.

The MBA stated that this increase was suggested in an amendment to the House Bill 6429, a bill aiming to provide access to visas for 55,000 workers with qualifications in high-skill areas such as science, technology, engineering, and mathematics.

This bill would thus extend the g-fee hikes initiated last year. When created, the 10-year g-fee increase was designed to recover losses regarding tax cuts; however, the MBA states that the increase of this amendment for another year would simply be to cover expenses related to the HB 6429, a bill associated with immigration.

Essentially, the most recent suggestion has been to extend the g-fee hikes, currently expiring on October 1, 2021, to October 2022. On Thursday, the House Rules Committee accepted this inclusion within the bill’s full text, and the House of Representatives is expected to deliberate on this matter on Friday.

According to a public statement from the MBA’s Stevens, Fannie Mae and Freddie Mac’s guarantee fees should not be used for unrelated policies, but rather as a stimulus for the mortgage industry by removing some of the inherent risks in lending. Stevens believes that such an amendment would send the wrong message to American borrowers during this crucial period of burgeoning housing recovery.

Stevens has consequently requested that Congress reevaluate the purpose of this unrelated g-fee extension.

In his statement, Stevens stated that making mortgages more expensive will only increase the uncertainty of the mortgage market and impede the strength of the housing recovery.