Surprise: Congress Now Contemplating G-Fee Hike for GNMA

Mortgage & Real Estate

With Congress moving closer to raising the guarantee fee on Fannie Mae and Freddie Mac loans, a proposal to hike Ginnie Mae fees by an equal amount is being circulated on Capitol Hill, National Mortgage News has learned.

Sources say private mortgage insurance companies are pushing the 10 basis point Ginnie fee hike as House and Senate lenders seek to find additional revenues to pay for an extension of the payroll tax holiday.  

The fortunes of the MI industry are tied to Fannie and Freddie, which are slated to see a 10 bp increase in their guarantee fees, whether Congress extends the payroll tax holiday temporarily or for a full year.  

Payroll taxes are due to increase on Jan. 1, which means Congress needs to find a solution soon.

Democratic leaders want to extend the tax holiday for one year, which makes the increase in the Ginnie Mae guarantee fee to 16 bps, from 6 bps, attractive.

Meanwhile, the MIs are warning lawmakers that the Federal Housing Administration will have a competitive advantage and field more loan business if the g-fees for Fannie and Freddie MBS are raised without a corresponding increase on Ginnie Mae MBS.

Lawmakers are already worried about FHA’s low capital levels and continuing losses on legacy loans.  

Separately, the House and Senate are expected to pass a $1 trillion appropriations bill Friday to prevent a government shutdown.  The appropriations bill includes a rider that extends the National Flood Insurance Program until May 31.

Daily Briefing | Friday, December 16, 2011

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