WASHINGTON — The Senate’s nearly $1 trillion bipartisan infrastructure proposal would be partially funded with an extension of the hike in guarantee fees charged by Fannie Mae and Freddie Mac.
Congress originally mandated the 10-basis-point increase in fees lenders pay the government-sponsored enterprises in 2011 to fund payroll tax relief. That add-on was set to expire later this year. But in a move sure to upset the mortgage industry, legislators are now considering extending the additional fee to provide $21 billion in funding for the infrastructure package, according
Under the infrastructure plan, lawmakers also propose raising $28 billion for the package by applying information reporting requirements to digital assets, including cryptocurrency. Under that proposal, businesses would have to report crypto transactions of at least $10,000.
Industry trade groups including the Mortgage Bankers Association, the American Bankers Association and the National Association of Realtors had
"We have indicated on numerous occasions that we were deeply troubled when g-fees were raised by 10 basis points for 10 years to fund a two-month period of payroll tax relief in 2011," said the letter, addressed to Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio, the co-negotiators of the infrastructure plan. "That increase harmed homebuyers by raising the cost of homeownership in all parts of the country — and continues to do so during the provisions decade-long lifespan, which expires in September."
Jaret Seiberg, an analyst with Cowen Washington Research Group, called the proposal to extend the guarantee fee tax “deeply disappointing.”
“Our expectation was that the fee would disappear on Oct. 1 when it was set to expire," Seiberg said in a research note. "That could have helped keep mortgage rates low.”
