Trade Groups Seek Passage of G-Fee Amendment

A coalition of housing and financial services trade groups have sent a letter to the U.S. Senate in support of a new bipartisan legislative amendment that seeks to ensure Fannie Mae and Freddie Mac credit risk guarantee fees (g-fees) will not be increased as a means of financing programs that are not related to housing.

“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans, and should be used only to manage the companies’ credit risk,” said the trade groups. “Increasing g-fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages. G-fee increases unrelated to housing could also act to hinder the necessary reforms required of the housing finance system in the years ahead.”

The trade groups backing this proposal were, in alphabetical order, the American Bankers Association, American Land Title Association, Credit Union National Association, Financial Services Roundtable, Housing Policy Council, Leading Builders of America, Mortgage Bankers Association, National Association of Federal Credit Unions, National Association of Home Builders and National Association of Realtors.