Controversial g-fee hike bill passes in House

By Sari R. Updated on 12/3/2012

The House of Representatives passed a bill on Friday that could mean the raising of g-fees on government-backed mortgages; the Senate still has to decide whether or not the bill will be passed.  The bill in question, House Bill 6429, doesn’t even deal with mortgages.  The bill is proposing an additional 55,000 visas for immigrants who can work in either mathematics, engineering, technology or science fields.  In order to pay for this, however, g-fee hikes would be extended until October 2022 instead of ending in 2021 as originally planned. 

Many involved in the mortgage industry have been expressing their dissatisfaction at this new bill; they believe that any g-fee increases should be for the purpose of offsetting mortgage risk.  As soon as this bill was in the House Rules committee, sponsor Lamar Smith (R-TX) pushed for a Manager’s Amendment that would bring the bill into compliance with “payfor rules” (legislation can’t be financed through deficit spending).  This would be done by extending fees included in the Temporary Payroll Tax Cut Continuation Act of 2011.  Title IV of the Temporary Payroll Tax Cut Continuation Act of 2011 raised g-fees and prohibited GSEs from offsetting the cost of this fee by lowering other fees associated with mortgages.  These funds from these g-fees were to be directly deposited into U.S. Treasury and would be used for other government purposes. 

House Bill 6429 would add on another year of g-fees which would be paid by mortgage originators, or, passed on to borrowers in their loan.

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