The MBA moves to prevent guaranty fees from being redirected to non-housing programs.

Fresh off of a regulatory victory in which the Federal Housing Finance Agency withdrew its controversial adverse market refinance fee, the Mortgage Bankers Association and several dozen industry trade groups took fresh aim at another controversial practice—a move in Congress to use the government-sponsored enterprises’ guaranty fees—known as “g-fees”—to offset funding for non-housing programs. In a letter to Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio—key players in negotiations over the infrastructure package–MBA and the trade groups urged negotiators to ensure that g-fees would not be used as funding offsets. “As representatives of institutions that span the entire housing finance ecosystem, we firmly believe that g-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses and to support the GSEs’ charter duties,” the letter said. It’s a point of contention that MBA and others in the real estate finance industry have had to fight on a yearly basis ever since the g-fees were first implemented in 2008. In 2011, Congress approved a 10-point basis point increase in the g-fees—over the strong objections of MBA and others—to fund a two-month period of payroll tax relief. Since then, MBA and others have repeatedly turned back efforts in Congress to redirect g-fees. But with the 10-year span of the g-fee increase set to expire this year, the letter aims to head off fresh efforts in Congress to redirect g-fees. “That [2011] increase harmed homebuyers by raising the cost of homeownership in all parts of the country – and continues to do so during the provision’s decade-long lifespan, which expires in September,” the letter said. “Since then, whenever Congress or the Administration has considered using g-fees to cover the cost of non-housing-related programs, our organizations have united to emphatically let lawmakers know that homeowners cannot, and must not, be used as the nation’s ‘piggybank.’ We are united again to reaffirm our opposition to the Congress’s potential use of these fees for any funding offset that may be contemplated.”

Source: The MBA