The Palm Harbor, Fla.-based company, which is a leader in the post-closing mortgage industry, supports the MBA’s belief that potential legislation could cause further damage to the housing market.
(PRESS RELEASE: Palm Harbor, FL (PRWEB), June 5, 2012) – Even in turbulent financial times, one constant remains in the United States; for many families, home ownership still represents the American dream, but Congress is making it increasingly difficult to afford that dream, Nationwide Title Clearing, Inc. (NTC) officials believe.
To fund student loan relief, lawmakers are currently contemplating a plan to raise guarantee fees charged to mortgage lenders by Fannie Mae and Freddie Mac. Recently, Congress decided to use the two government-controlled housing finance firms’ guarantee fees to bankroll a two-month extension of payroll tax cuts and jobless benefits. A story published by Reuters reported that the move led to a 1/8-percentage point increase to Fannie Mae and Freddie Mac residential mortgage interest rates, according to estimated from the Mortgage Bankers Association (1).
Officials from NTC, which is a leader in the post-closing mortgage industry and an advocate for best practices and legislation that standardizes its industry and benefits homeowners, point out that many consumers are likely unaware that they will ultimately be the ones paying for Congress “raiding the piggy bank” by subtly increasing fees to Fannie Mae, Freddie Mac and Ginnie Mae loans. NTC supports the Mortgage Bankers Association’s (the MBA’s) position that Congress should leave the GSE guarantee fees alone.
“We oppose Congress raising Fannie Mae and Freddie Mac’s guarantee fees to pay for spending on unrelated programs,” said John Hillman, who is NTC’s CEO. “This is Congress’s indirect way to raise taxes to fund non-mortgage related budget items, such as student loan relief and payroll tax cut extension and jobless benefits.”
Hillman added that the proposed increases will lead to higher interest rates that will be passed on to American families who are buying or refinancing their homes. “Any increase in guarantee fees should be used by the GSE’s exclusively to manage their credit risk exposure. Implementing additional increases will hinder the necessary reforms required of the GSE’s in the years ahead.”
During the Mortgage Bankers Association National Advocacy Conference in Washington D.C. in April, NTC officials met with members of Congress and their staff to discuss issues related to the residential mortgage industry. Congress tapping the guarantee fees was a hot-button topic of the conference.
(1) Reuters.com. “Fannie, Freddie easy prey for cash-hungry Congress,” May 30, 2012, http://www.reuters.com/article/2012/05/30/usa-mortgages-congress-idUSL1E8GHFJV20120530
