Update: On December 17, the Senate passed legislation that would raise annual premiums on single-family FHA mortgages to help pay for a two-month extension of the payroll tax cut, in addition to the Fannie Mae and Freddie Mac G-fee increase included in a 12-month payroll tax-extension bill the House passed last week. Today, the House rejected the Senate-passed bill. House Republican leaders say they would prefer to negotiate a 12-month extension of the tax cut.
NCSHA's original post on the proposed increase in loan guarantee fees is below.
The House this week passed legislation that would increase the loan guarantee fees (G-fees) charged by Fannie Mae and Freddie Mac (GSEs) to pay for unemployment insurance and payroll tax cut extensions, among other provisions.
H.R. 3630, The Middle Class Tax Relief and Job Creation Act, sponsored by House Ways and Means Committee Chairman David Camp, would require the GSEs to phase in, over a two-year period, an increase in G-fees of at least 10 basis points for each origination year or book year above the average fees imposed in 2011 for such guarantees. Under the bill, the fees would not be considered a reimbursement to the federal government for the subsidy provided to the GSEs but would be disbursed as required by subsequent appropriations.
The House passed H.R. 3630 on December 13 by a vote of 234 to 193. Senate Democratic leaders and the White House oppose the House measure due to disagreement over how to pay for the package and the inclusion of policy riders such as the rollback of EPA pollution rules and the future of the Keystone XL pipeline.
While both parties disagree over how to pay for the tax-cut extensions, the idea of raising the G-fees appears to have garnered at least some bipartisan support. On December 5, Senator Robert Casey (D-PA) introduced S. 1944, the Middle Class Tax Cut Act of 2011, which would raise the G-fees to pay for a short-term extension of the payroll tax cut. Casey’s bill was considered in the Senate but was not able to get the sixty votes needed to move forward.
House and Senate leaders are currently working to resolve the parties’ disagreements on how to pay for a tax cut extension package. It seems likely that the final bill will include a G-fee increase.