Sanford, Sherman Introduce The Risk Management and Homeowners Stability Act of 2017
WASHINGTON, DC - Today, Representatives Mark Sanford (R-SC) and Brad Sherman (D-CA) introduced H.R. 916, the Risk Management and Homeowner Stability Act.
“This bill simply ensures that guarantee fees (g-fees) can’t be used as a budgetary offset outside of their intended purpose, which is to provide stability for the mortgage market,” said Representative Mark Sanford. “G-fees should be used to protect taxpayers from risk, but using them to fund unrelated programs weighs down homeowners with an unnecessary burden, exposes taxpayers to additional risk, and prevents Fannie Mae and Freddie Mac from appropriately managing this risk. Using g-fees to pay for unrelated spending means that homeowners become a de facto national piggy-bank for Congress. This bill simply ensures that the promise that came when these fees were created is the promise kept.”
“Past proposals have attempted to use g-fees to pay for unrelated government spending on the backs of homeowners” said Congressman Brad Sherman. “G-fees are a critical risk management tool, and they should continue to be used only for that purpose.”
Guarantee fees are charged and used as a risk management tool by Fannie Mae and Freddie Mac to protect against borrower defaults. This bill would amend the Budget Control Act of 1974 to ensure that guarantee fees cannot be used to offset spending unrelated to protecting the mortgage market.