CUNA thanked Rep. Brad Sherman (D-Calif.) in a letter Friday for co-sponsoring the Risk Management and Homeowner Stability Act (H.R. 4893). The bill was introduced in April by Rep. Mark Sanford (R-S.C.).
H.R. 4893 would prohibit the use of guarantee fees (g-fees) to offset unrelated federal spending. Government-sponsored entities (GSEs) Fannie Mae and Freddie Mac charge lenders guarantee fees, or g-fees, primarily to protect against credit-related losses in the mortgages they back.
In 2011, those fees were raised by 10 basis points until 2021 to fund a two-month extension of a payroll taxcut.
“Using guarantee fees for purposes entirely unrelated to housing is not sound public policy,” wrote CUNA President/CEO Jim Nussle in a letter to Sherman. “The GSEs charge these fees specifically to offset the risk of guaranteeing payment of principal and interest on loans packaged into agency securities; artificially inflating these fees can elevate housing costs above natural rates, putting homeownership out of reach for many American families at a time when the housing market is still in recovery.”
CUNA successfully fought to keep g-fees from being extended and used to fund highway programs last year, citing similar concerns about the fees’ effect on homeowners and the housing sector.