Last year, Congress battled over the use of g-fees to pay for part of a transportation bill, according to a HousingWire report. Eventually, the mechanism which allowed g-fees to fund the bill – which would have delayed scheduled g-fee cuts – was removed, HousingWire reported.
Now, new legislation – introduced by Rep. Mark Sanford (R- S.C.), Rep. Brad Sherman (D-Calif.) and Rep. Randy Neugebauer (R-Texas) would permanently ban the use of the fees as budget offsets.
“This bill simply ensures that guarantee fees cannot be used as budgetary offsets outside of their intended purpose – to provide stability for the mortgage market,” said a release from 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.
“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. 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.”
New legislation from the House of Representatives would forbid the government from using Fannie Mae and Freddie Mac guarantee fees to cover federal spending.