WASHINGTON (1/9/14)--Credit risk guarantee fees charged by government-sponsored enterprises Fannie Mae and Freddie Mac must not be used to offset the cost of the Emergency Unemployment Compensation Extension Act (S. 1845), or any other longer-term solution that could emerge in either chamber, the Credit Union National Association said in a Wednesday letter to members of the U.S. Congress.
In the letter, CUNA and others noted that guarantee fees (g-fees) are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans. Increasing guarantee fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages, the letter added.
"Though we are seeing signs of improvement in the real estate sector, we must avoid taking any steps that could keep housing consumers on the sidelines and hinder that recovery," the letter said.
The letter was cosigned by the American Bankers Association, American Land Title Association, Community Mortgage Lenders of America, Housing Policy Council, Mortgage Bankers Association, National Association of Federal Credit Unions, National Association of Home Builders and the National Association of REALTORS®.