Congressmen: G-fees should be banned from use on federal spending

by Ryan Smith08 Feb 2017

Two congressmen have introduced a bill that would permanently ban using Fannie Mae and Freddie Mac guarantee fees to cover federal spending not related to mortgages.

Guarantee fees, or g-fees, are charged to cover the GSEs’ costs for guaranteeing mortgages should borrowers fail to pay. In 2015, Congress battled over the use of g-fees to pay for part of a transportation bill. Eventually, the mechanism allowing g-fees to fund the bill – which would have delayed scheduled cuts to the fees – was removed.

Last year, Rep. Mark Sanford (R-S.C.), Rep. Brad Sherman (D-Calif.) and Rep. Randy Neugebauer (R-Texas) introduced a bill that would permanently ban the use of the fees as budget offsets. The bill wasn’t successful, but now Sanford and Sherman are reintroducing it, according to a HousingWire report.

“This bill simply ensures that guarantee fees can’t be used as a budgetary offset outside of their intended purpose, which is to provide stability for the mortgage market,” Sanford said. “G-fees should be used to protect taxpayers from risk, but using them to fund unrelated programs weighs down homeowners with an unnecessary burden, exposes taxpayers to additional risk, and prevents Fannie Mae and Freddie Mac from appropriately managing this risk.”

“Past proposals have attempted to use g-fees to pay for unrelated government spending on the backs of homeowners,” Sherman said. “G-fees are a critical risk-management tool, and they should continue to be used only for that purpose.”


Related stories:
Bill would bar using g-fees for federal spending
 

COMMENTS

  • by Another Hit to the Cost | 2/8/2017 3:18:00 PM

    Have fun getting G Fees to be used only for Mortgages. Anytime there is money involved someone will lobby for find a Special Interest meaning there own interest on how it should be used.

  • by No No No Not Today | 2/8/2017 3:34:01 PM

    It's time to hold our government up to its own standards. You can't talk about how bad the mortgage industry is and do these kinds of things to make mortgages more risky. What about government mortgage mortgages taking riskier credit these days also? Some of these mortgages could be more riskier than the no-income & no-assets mortgages made due to the economic conditions such as lack of rising incomes, lack of GDP growth, burdensome student mortgage debts, burdensome credit card debts, etc. These are some of the things that regulators could be proactive and work to help fix before they start to bubble and head towards another mortgage collapse. It's pretty easy to say you should have done this or that. It's much tougher to be held accountable for controlling the factors that you have control over.

  • by A good idea | 2/22/2017 12:08:36 PM

    When has the government ever stopped themselves from grabbing every dollar they could get their hands on?

    WE have to stop them. Look what the govt did to Social Security and the "distrust" fund it was supposed to be.

    It was all dumped into the general budget and pissed away. This is a good idea and I hope it becomes law.

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