NAR President John Smaby issued the following statement following the introduction of S.1463 in the Senate. The legislation, officially noted as a bill to “establish a scorekeeping rule to ensure that increases in guarantee fees of Fannie Mae and Freddie Mac shall not be used to offset provisions that increase the deficit,” was introduced by Senators David Perdue (R-GA) and Bob Menendez (D-NJ) on Tuesday afternoon.
“The National Association of Realtors® commends Senators David Perdue and Bob Menendez for taking action to secure America’s housing finance system,” Smaby, a second-generation Realtor® and broker at Edina Realty in Edina, Minnesota said. “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.”
Senator Perdue and Menendez’s bill will prevent increases in fees paid by individuals seeking a mortgage through the GSEs when those fees are used to fund unrelated federal spending.
Fannie and Freddie, which help to finance roughly half of all mortgage loans made in this country, charge mortgage lenders a guarantee fee in return for insuring the payment of principal and interest on mortgage backed securities. G-Fees, as one of Fannie and Freddie’s two primary sources of income, are collected as a risk management tool to protect against potential losses, determined based on risk associated with a borrower, the property and the type of loan being secured. NAR believes, however, that any increases in these fees must be invested back into the housing finance system, not used for unrelated federal spending.
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.