Mortgage Compliance

Should G-Fess Be Congress’ ATM?

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g-fees-atm-congress-house-rule-916House Rule 916, the Risk Management and Homeowner Stability Act, was recently introduced as bi-partisan legislation by Representatives Mark Sanford (R-SC) and Brad Sherman (D-CA).

The bill is intended to restrict increases in agency Guaranty Fees to finance reforms to the secondary markets and prohibit use by Congress to fund other programs or cover budget shortfalls for such programs.

“G-fees”, as they’re commonly known in the mortgage financing industry, are used by Fannie and Freddie as a risk tool to offset the potential for loss from defaulting loans. These fees increase the cost of borrowing to a homebuyer.

To use these for other budgetary purposes outside mortgage financing places an unfair tax on homebuyers. A tax they will pay for the life of their loan.

In 2011, Congress passed a bill to use a G-Fee increase to fund a payroll tax cut. The MBA and other industry groups have since been fighting to prevent further increases to offset budgetary needs.

These groups sent a letter to Congress in support of HR 916 and more than 2,000 MBA members have also voiced their support through MBA’s Call to Action.

Join the MBA, and other industry trade groups, to fight increases by contacting your Representatives in the House and providing your support for HR 916 before the ATM runs dry.

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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