G-fee hikes: Mortgage pros slam lawmakers

by Ryan Smith10 Jan 2014
Three Republican lawmakers are urging the regulator of Fannie Mae and Freddie Mac to increase mortgage guarantee fees as previously scheduled.

Newly appointed Federal Housing Finance Agency Director Mel Watt has said he would delay the fee hikes – scheduled during his predecessor’s tenure – until he can fully evaluate their impact. But Congressmen Scott Garret (R-N.J.), Randy Neugebaur (R-Texas) and John Campbell (R-Calif.) urged Watt to rescind his decision to delay the increases, saying they were important tools for luring private capital back to the mortgage industry.
That position didn’t sit well with MPA readers. Many, like Cheryl M, considered the proposed g-fee hike to be just another government money grab.

“All they are (looking) for is more money to support their recent extension of unemployment insurance,” she wrote. “Somehow the mortgage industry seems to be the support for all these extensions and rate hikes … Congress needs to find at another industry to suck the life out of. Or maybe stop the extensions and create jobs for those unemployed.”

Reader Griff agreed, citing the 2011 g-fee hike that helped pay for the extension of an expiring tax cut.

“One would read the words ‘payroll tax cut’ and ‘uniform pricing among lenders’ and say WHAT THE HECK DOES ONE HAVE TO DO WITH THE OTHER?” he wrote. “The answer is nothing. Washington is grabbing more money to do with as they wish.”

David also felt the government saw the mortgage industry as a cash cow.

“If they were able to ‘lure’ the private sector back into the mortgage market the cost to the borrowers would rise,” he wrote. “The real problem with the mortgage market is that the government is involved now to the point that they see the industry as just a revenue generator for them. NOTHING they have done has benefited the borrower in anyway. Borrowers have a harder time getting a mortgage now than ever before, even the BEST borrowers.”

John AI, meanwhile, praised Watt for his decision to delay the fee hikes:

“Mel Watt should be congratulated by all of us for taking the reins of leadership and having the intestinal fortitude to study these increases BEFORE implementation. Congress continues to frustrate those of us who are trying to run financial service companies. The lust for more revenue should not preclude leaders like Watt to do what they have been appointed to do.......LEAD.”
 

COMMENTS

  • by Kevin Hanna | 1/10/2014 8:50:13 AM

    Amen!

  • by Robert | 1/10/2014 9:27:57 AM

    Amen again!! Exactly how does adding more fees on a purchaser help make the process
    more affordable? The purchase of a home is the start of a waive that supports a countless
    list of industries, jobs and tax revenues at all levels.The industry needs buyers not renters!

  • by MA broker | 1/13/2014 10:50:41 AM

    If those fees had gone through I was going to advise my high FICO clients to pay a bill late and drop their score so they wouldn't get charged more than the low FICO borrowers get charged. The tail is wagging the dog in DC. Penalize the people who do things right - reward the slugs.

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