The Senate over the weekend added a guarantee fee increase for Ginnie Mae MBS to the payroll tax bill, passing the measure by an overwhelming margin of 89-10.
The language was added to the bill after heavy lobbying from the mortgage insurance industry which feared that a 10 basis point g-fee hike for Fannie Mae and Freddie Mac MBS would tilt the market toward Federal Housing Administration (FHA) loans. (The final bill now includes g-fee hikes for all three: Fannie, Freddie and Ginnie.)
The MIs pushed for the Ginnie Mae fee hike, claiming the FHA would have a competitive advantage and field more business if the g-fees for Fannie and Freddie MBS are raised without a corresponding increase on Ginnie Mae MBS.
Ginnie also provides a securitization outlet for Department of Veteran Affairs (VA), and Rural Housing Service guaranteed loans. Meanwhile, House Republicans are balking at approving the Senate bill because it only extends the payroll tax holiday for two-months.
House speaker John Boehner, R-Ohio, said his members want a full-year extension, which means the bill will have to be re-written and passed before yearend. The current payroll tax holiday expires Jan. 1.
The toughest hurdle involves paying for a 12-month extension of the payroll tax holiday along with various other provisions dealing with unemployment benefits and payments to Medicare doctors.
Due to the Senate vote, there is almost certainty that a g-fee hike for all three GSEs will be included in the final bill, which lawmakers will hammer out in the next few days.
In other Ginnie Mae news, the agency's issuance is on the rise. Residential lenders issued $28.4 billion of Ginnie Mae-backed MBS in November, a 7% gain from the previous month, according to new figures issued by the agency.
Refinancings pushed November MBS issuance to the highest level since February 2011 when mortgage bankers sold $35.2 billion of product into securities.
Since February Ginnie MBS monthly issuance has ranged between $24 billion and $28 billion.
Ginnie Mae-guaranteed MBS are backed by FHA, VA, and Rural Housing Services loans.