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Congress has already approved of raising ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ guarantee fees to support non-housing related initiatives once before. Now, lawmakers are contemplating the use of GSE guarantee fees to fund student loan relief.
[IMAGE]In response to this, officials from ""Nationwide Title Clearing"":https://www.nwtc.com/ sent a release asking Congress not to ""raid the real estate piggy bank.""
""We oppose Congress raising Fannie Mae and Freddie Mac's guarantee fees to pay for spending on unrelated programs,"" said John Hillman, NTC's CEO. ""This is Congress's indirect way to
[COLUMN_BREAK]raise taxes to fund non-mortgage related budget items, such as student loan relief and payroll tax cut extension and jobless benefits.""
Hillman said the proposed increases will lead to higher interest rates that will be passed on to American families who are buying or refinancing their homes.
The ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA) and other trade groups have expressed opposition toward any decision from Congress to raise GSE guarantee fees for unrelated issues. In December 2011, lawmakers approved of a two-month payroll tax cut extension that was funded in part, through a 10 basis point increase in guarantee fees over a 10-year period.
Guarantee fees are charged to lenders who sell mortgage-backed securities to investors; the fees exist to protect against credit-related losses.
According to a ""brief"":http://www.realtor.org/topics/government-sponsored-enterprises-gses/guarantee-fees published by the National Association of Realtors, sources have cited the increase in guarantee fees costs about $4,000 to $5,400 over 30 years on a $200,000 loan. On a monthly basis, the approximate increase is estimated to be between $11-15.
The ""fee increase"":http://dsnews.comarticles/new-law-requires-gses-increase-guarantee-fees-2012-01-03 took effect April 1, 2012.
