Senators Perdue, Menendez Take Bipartisan Action To Protect Homeowners
Introduce Bill To End Budget Gimmicks & Keep Taxpayers Off The Hook
WASHINGTON, D.C. – U.S. Senators David Perdue (R-GA) and Bob Menendez (D-NJ), the chairman and ranking member of the Senate Banking Committee’s Subcommittee on Housing, Transportation, and Community Development, are taking bipartisan action to protect American homeowners. The senators are introducing a bill to prevent the United States Senate from enacting a controversial provision that would allow Congress to increase guarantee fees on homebuyers to finance the federal government’s unrelated spending increases. The bill is also cosponsored by U.S. Senators Thom Tillis (R-NC) and Jon Tester (D-MT).
Guarantee fees (G-Fees) are collected by Fannie Mae and Freddie Mac as a risk management tool to protect against potential credit losses. When used as intended, G-Fees are determined by the risk and type of the loan being guaranteed to a homeowner. However, when Congress arbitrarily increases these fees and diverts the money for unrelated spending, taxpayers are left on the hook and homeowners are ultimately forced to incur a hidden tax hike in their mortgage bill.
“It’s time for Congress to cut the budget gimmicks and back-door tax hikes on middle class Americans,” said Senator Perdue, a member of the Senate Banking and Budget Committees. “Any increase of guarantee fees should be used to protect taxpayers from mortgage losses, not as an artificial offset whenever Congress decides to spend more money. Ultimately, the federal government should budget responsibly for its needs, just like people in the real world.”
“The last thing Congress should be doing is making it more expensive for middle class families to borrow and buy a home – especially to use it to pay for wasteful policies that don’t support the middle class or homeowners,” said Senator Menendez. “Yet, that’s exactly what an arbitrary and unfair fee hike on homeowners would do. We need Fannie Mae and Freddie Mac to stick to the job of helping families achieve the American Dream of homeownership. Neither Congress nor the President should be balancing its books on the backs of hardworking homeowners.”
“The National Association of Realtors® commends Senators David Perdue and Bob Menendez for taking action to secure America’s housing finance system,” said National Association of Realtors President John Smaby. “By preventing Congress from using GSE revenues to fund unrelated federal government spending, this legislation will help to protect taxpayers and countless potential homebuyers, ensuring Fannie Mae and Freddie Mac can continue helping families and credit worthy individuals achieve the American Dream. This is the mission Congress outlined for the GSEs when they were first chartered, and NAR will continue working with Congress to support the critical role Fannie and Freddie play in our housing market.”
“MBA applauds Senators Perdue and Menendez for their commitment to protect current and future homeowners from unnecessary costs,” said Mortgage Bankers Association President and CEO Bob Broeksmit. “Guarantee fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses. Any increase of these fees that is not related to housing is effectively a tax on home ownership. MBA will continue to advocate on behalf of policies that both ensure a healthy real estate market and provide consumers with affordable, sustainable housing choices.”
Click here for bill text.
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