Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

GOP lawmakers urge Watt to hike g-fees

Notify me of new replies via email
Mortgage Professional America | 09 Jan 2014, 09:37 AM Agree 0
What do you think? Should g-fees be raised on schedule, or are these lawmakers way off base? Let us know your thoughts in the comments below.
  • Chris | | 09 Jan 2014, 09:54 AM Agree 0
    did anyone see the proposed changes? borrowers getting penalized interest rates-wise all the way up to a 780 credit score. So, someone who has perfect credit, never had a late payment in their life with a 779 middle score - does NOT qualify for the best possible mortgage, too risky
  • Cheryl M | | 09 Jan 2014, 10:01 AM Agree 0
    Don't do it!! All they are look for is more money to support their recent extension of unemployment insurance. Somehow the mortgage industry seems to be the support for all these extensions and rate hikes, fee hikes enough is enough. Watt be smarter than that, the mortgage industry is still paying for the BP oil spill from some of the last rate hikes by the GOP. Congress needs to find at another industry to suck the life out of. Or maybe stop the extensions and create jobs for those unemployed.
  • Bob VG | | 09 Jan 2014, 10:02 AM Agree 0
    Republican idiots.
    Private investors will/are returning offering programs that allow self employed home ownership as well as Jumbo borrowers more attractive financing.
    Let's kill the middle class completely---mantra of Politicians on both sides.
  • Robert | | 09 Jan 2014, 10:04 AM Agree 0
    As usual the know nothing politicians getting involved in things they know nothing about and makings decisions that are going to stop the average American from purchasing a home or making their payment higher. It never ends. They are always saying they need to protect the cosumer but the consumers are the ones who are ALWAYS getting penalized.
  • Nancy | | 09 Jan 2014, 10:09 AM Agree 0
    I really have to disagree with the GOP on this one. Everything going up for the consumer because of QM. The tolerance on APOR will not pass QM on a 0/0 mortgage to the borrower on small mortgages with lower scores especially on Homepath, and Homepath Reno's. Loans will not pass with more hits to the rate. Get rid of that idiotic APOR rule and leave the APR with what it should be calculated against. The broker cannot swallow any more fees.
  • John AI | | 09 Jan 2014, 10:16 AM Agree 0
    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.
  • David | | 09 Jan 2014, 10:17 AM Agree 0
    If they were able to "lure" the private sector back into the mortgage market the cost to the borrowers would rise. 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. If they would have just gone back to realistic underwriting that we had for 30 years prior to sub prime we would be fine. But they insist that they know how to fix it, right. With 36 years in the industry I have never seen such a messed up situation with no real benefit to anyone. More government is not the answer for our industry.
  • Griff | | 09 Jan 2014, 10:20 AM Agree 0
    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? The answer is nothing, Washington is grabbing more money to do with as they wish. And, I daresay consumers would not consider G fees excessively low no matter how low they are.
  • being human | | 09 Jan 2014, 10:22 AM Agree 0
    I could see the fee if they actually outlawed any donations and gifts to all Politician and non profits. And Got rid of the reverse mortgage thru FHA. Until then, there shouldn't be a fee.The only way to get private money into the game is to lower the Conventional mortgage amount and do away with the expanded conventional program. Do away with the current appraisal system and piggy back on to the VA system. Thus getting good qualified Appraisers. the current system shields all the bad appraisers thru a middle man service. This Texas politician should quit crying to his mommy and actually do some good and help fix the mortgage rules in Texas.
  • Nancy | | 09 Jan 2014, 10:38 AM Agree 0
    Be careful what you are hoping for with Mel Watt. On this one issue, I agree so far. But look at what he finds after a "careful" look see. He would not have been vetted by Obama for this spot if he was not very much to the left.
  • jack cye | | 09 Jan 2014, 12:08 PM Agree 0
    I would like to run the credit on all the politicians and see what their scores would be.

    I bet 80% of them have substandard scores and could not get a prime rate. Another back door tax.
  • being human | | 09 Jan 2014, 01:32 PM Agree 0
    And if you are doing a mortgage for them (politicians). It would be all your fault for not getting them a good rate. Since we are the sleezy brokers.And are making soo much money.
  • Ken Riedel | | 09 Jan 2014, 03:02 PM Agree 0
    Without the g-fee hikes the government is, in effect, keeping private investors out of the conforming mortgage market by creating a subsidy for Fannie and Freddie. Let the free market do its job.
  • Bob VG | | 09 Jan 2014, 03:07 PM Agree 0
    How so Ken?
  • Ken Riedel | | 09 Jan 2014, 03:17 PM Agree 0
    Correct me if I'm wrong, Bob, but my understanding is that the g-fee is the price investors pay for having a fed govt gaurantee. This renders an investment in GSE Mortgage-Backed Securities relatively risk-free. The fee as it is now is artificially low. Bringing it more in line with actual risk would create a level playing field, allowing non-GSE mortgages to be a more competitive investment.
  • Bob VG | | 09 Jan 2014, 03:28 PM Agree 0
    I believe you are correct Ken. However Mortgage backed securities have historically been relatively risk free.(even before the first implementation of a G-Fee) Not sure how you (in general) would calculate actual risk and correlate that risk to .375 increase in fees.
    I believe Private investors would come back to the Market- the G-fee increase is just one of several "barriers" that many home buyers will be facing in 2014.
  • Connie in Dallas | | 09 Jan 2014, 03:41 PM Agree 0
    Ken, you state the g-fee is artificially low but what are you basing that on? The actual risk of GSE mortgages has dropped so much that I don't believe we can know what the market rate is without further impact studies.
  • Ken Riedel | | 09 Jan 2014, 03:53 PM Agree 0
    Good point, Connie. How do we know where that fee should be? Or how, for that matter do we know how many impact studies it will take to determine this? I'd guess it's probably too low even with the increase. But that's the whole point. Why should the government be involved at all? The market does a much better job of assessing risk than any government official ever will.

    As for claim that MBS is relatively risk-free, not sure how you come to that conclusion, especially after the last 6 years. The only reason investors in GSEs didn't lose almost everything is thanks to a massive government bailout. In other words, the taxpayers took the loss. For non-GSE MBS investors (like pension funds and sovereign wealth funds) the losses were catastrophic. How is that risk-free?
  • Bob VG | | 09 Jan 2014, 04:11 PM Agree 0
    Historically Ken.
Post a reply