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Two dozen industry groups have joined forces to oppose any plan to raise Freddie Mac<\/strong> and Fannie Mae<\/strong> guarantee fees (g-fees) to pay for an infrastructure package.<\/p>\n Last weekend, a plan to raise revenue through expanded tax enforcement to pay for the bipartisan infrastructure package<\/a> fell by the wayside. That measure was expected to bring in $700 billion in revenue. With that off the table, Senators are now casting about for an alternative.<\/p>\n The spectre of raising g-fees horrified industry stakeholders. Bill Killmer, the Mortgage<\/strong> Bankers Association\u2019<\/strong>s senior vice president for legislative and political affairs, described g-fee increases as a \u201czombie pay-for that roams the earth.\u201d<\/p>\n The industry groups wrote that g-fees should only be used as a risk management tool to buffer against potential mortgage credit losses and to support the GSEs\u2019 charter duties.<\/p>\n The coalition \u2014 made up of groups that don\u2019t always see eye-to-eye on other issues \u2014 spans nearly every corner of the industry.<\/p>\n The MBA, the American Bankers Association<\/strong> and the Housing Policy Council<\/strong>, which represent the mortgage finance sector, signed onto the letter, as did the Consumer Federation of America<\/strong>, which advocates for consumers, the National Housing Conference<\/strong>, an affordable housing advocacy group, the National Multifamily Housing Council,<\/strong> which represents large multifamily landlords and the National Association of Realtors<\/strong>, which represents real estate brokers.<\/p>\n Kilmer said members of the coalition got word that the Senate was considering using g-fees as a way to pay for the infrastructure package. Within 24 hours, the two dozen groups sprang into action to pen a letter explaining their opposition.<\/p>\n \u201cIt\u2019s a tax on housing consumers for one purpose, risk management of the [Government Sponsored Entities] loan portfolio, to pay for some other purpose,\u201d said Killmer.<\/p>\n Freddie Mac and Fannie Mae charge g-fees to lenders<\/a> to cover credit losses from borrower defaults, administrative costs and a return on capital. In 2019, g-fees<\/a> amounted to 58 basis points on average for a 30-year fixed rate loan. Those increases are passed on to borrowers in the form of a higher interest rate.<\/p>\n The use of g-fees to pay for non-housing related items is not an idle threat \u2014 it has precedent in recent history.<\/p>\n In 2011, to support a two-month period of payroll tax relief, Congress raised g-fees by 10 basis points for a period of 10 years. That increase expires in September. Members of Congress may be eyeing that deadline and considering re-upping the fees, sources said.<\/p>\n \u201cSince 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\u2019s \u2018piggybank,\u2019\u201d the groups wrote.<\/p>\n \u201cThe benefits of affordable homeownership accrue to families, communities, and our national economy; we simply cannot allow these benefits to be jeopardized by efforts to raise g-fees unnecessarily,\u201d the letter reads.<\/p>\n Negotiations are still underway<\/a> in the Senate for bipartisan legislation which would take up traditional infrastructure like bridges, roads, rural broadband and upgrading the power grid. <\/p>\n Those talks hit a snag earlier this week when Senate Majority Leader Chuck Schumer pushed for a vote on Wednesday to advance the measure. Republicans had opposed the timeline and the vote failed, although Schumer subsequently filed a motion to reconsider.<\/p>\n A bipartisan group of Senators have yet to agree on how to raise revenue for the package. Democrats are also pushing a separate $3.5 trillion infrastructure package, which would advance a social infrastructure agenda.<\/p>\n The post Industry to Congress: G-fees aren\u2019t your \u201cpiggybank\u201d<\/a> appeared first on HousingWire<\/a>.<\/p>\n