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Proposed 2021 Budget Would Increase G-Fees
Thursday, February 13, 2020
The 2021 Federal Budget
prepared by the White House is given little chance of passing Congress but
there are a couple of provisions buried in the hundreds of pages of text that might
be of interest to MND readers. One is a 10-basis point
increase in g-fees, the guarantee fees the government sponsored enterprises
(GSEs) Fannie Mae and Freddie Mac charge lenders for guaranteeing loans. The White
House estimates the new fee will generate $34 billion over the next 10 years. The current fee averages
about 55 basis points including a 10-basis point fee put in place in 2011 to
fund the Temporary Payroll Tax Cut. Legislation enabling that fee will expire in
2021 and it is estimated to have generated $31 billion over the last ten years.
What is unclear is whether the new fee would be in addition to the "temporary"
fee or if it will be allowed to expire.
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