Oppose Language in H.R. 3630 Tapping Fannie Mae/Freddie Mac “G-Fees” for Offsets

Recipient: Conference on H.R. 3630

Dear
Conferee on H.R. 3630, the Temporary Payroll Tax Cut Continuation Act:

On behalf of The Leadership Conference on Civil
and Human Rights, we urge you to oppose any language in H.R. 3630 that would
use Fannie Mae’s and Freddie Mac’s credit risk guarantee fees (“g-fees”) as a
source of funding to offset the extension of the payroll tax cut, emergency
unemployment insurance (UI), and the Medicare reimbursement.

The use of g-fees should be limited to
minimizing the loss exposure to these two government-sponsored enterprises
(GSEs), investors, and taxpayers. Increasing these fees, only to divert
them away from their intended purpose, will serve as a de facto tax increase on
homebuyers – raising costs on many of the same Americans that H.R. 3630 is
trying to help. The burden of such a diversion, or a similar increase in Ginnie
Mae’s g-fees or FHA mortgage premiums, would be disproportionately felt by
low-and moderate-income people who might otherwise become homeowners.

The diversion of g-fees could also
further complicate the already difficult issue of housing finance reform in the
years to come, as any effort to alter the GSEs’ role in the market would result
in a loss of federal revenue.

There are far less harmful
alternatives to offset the costs of H.R. 3630. Even the most modest increase in
taxes on millionaires would adequately offset the payroll tax cuts and other
provisions in H.R. 3630, without placing further burdens on housing markets
throughout the country that are still struggling to recover.

While an increase in g-fees was
included in the recent two-month extension of payroll tax cuts and unemployment
insurance, we urge you to oppose any further increases. Thank you for your
consideration of our views. If you have any questions, feel free to contact
either of us, or Senior Counsel Rob Randhava, at (202) 466-3311.

Sincerely,

Wade Henderson
President & CEO

Nancy Zirkin
Executive Vice President