Fannie Mae (FNMA)

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It has been a decade since Congress last passed a long-term transportation bill, even though lawmakers in both parties generally support highway and transit aid. The difficulty has been finding the money to pay for programs in a way that doesn't increase the federal deficit.
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Congress could raise the gas tax, but lawmakers fear a voter backlash.

http://www.newser.com/article/ff9131ecca24420382d8cbac3d3d740e/congress-poised-to-leave-town-with-many-sticky-issues-unresolved-complicating-the-fall-agenda.html


So let's just steal the money from the TAXPAYER/SHAREHOLDER OWNED GSE piggy bank:

Highway Detour of Fannie Fees May Kill GSE Reform, Senators Say

by Jesse Hamilton
July 23, 2015 — 3:41 PM EDT

U.S. housing-finance reform may be even more remote thanks to a provision in the Senate’s transportation bill that uses the mortgage giants as a source for funds, according to lawmakers and industry groups.

Congress is considering taking some of the fees government-sponsored enterprises Fannie Mae and Freddie Mac charge to guarantee home loans to patch up U.S. highways, which isn’t the first time lawmakers have turned to the mortgage companies for unrelated spending. Senators Mike Crapo and Mark Warner object to using the money as a governmental “piggy bank,” which undermines the chances the mortgage companies can be neatly disposed of, they said in a July 22 letter to Senate leaders.

“Attempts to increase or extend these fees makes it more difficult to reform our housing finance system and wind down Fannie Mae and Freddie Mac,” said Crapo, a Republican from Idaho, and Warner, a Virginia Democrat, who are both on the Banking Committee. They said the tactic also makes taxpayers more vulnerable to losses at the government-controlled companies, and is banned by Congress’ budget resolution.

A bipartisan bill that would have replaced Fannie Mae and Freddie Mac with government insurers taking losses behind private investors almost made it to a vote in the Senate last year. The bill failed after some Democrats said it didn’t give enough support to affordable housing. Reform suffered another setback when Senator Richard Shelby, a Republican from Alabama who controls the fate of housing bills as chairman of the Banking Committee, said earlier this year he wouldn’t support replacing the two U.S.-controlled companies with a system that includes explicit government backing for mortgages.

Borrower Rates

This year’s highway-construction measure -- aimed to keep highway dollars from drying up on July 31 -- relies on a bipartisan Senate deal that would mostly fund the three-year plan by reducing Federal Reserve dividends to banks. One of the other sources of funds would be $1.9 billion gained from extending an earlier increase in the fees Fannie Mae and Freddie Mac charge to mortgage lenders. Lawmakers also used higher guarantee fees to offset payroll tax cuts in 2011.

Extending the fee increase from 2021 to 2025 is “short-sighted and intellectually inconsistent” with the bipartisan calls for reform, according to Isaac Boltansky, an analyst at Compass Point Research & Trading LLC.

The fees -- commonly known as “g-fees” -- guarantee principal and interest on home loans, and Fannie Mae and Freddie Mac have historically used that revenue to cover mortgage defaults. The mortgage companies were placed under conservatorship in September 2008 and took almost $190 billion in U.S. aid after losses on investments in risky loans pushed them to the brink of insolvency.

Keeping their fees elevated could also make buying a home more difficult as the charges get factored into borrowers’ loan rates, according to a letter to Senate leaders from the American Bankers Association, Mortgage Bankers Association and other mortgage and homebuilder industry groups.

Raising borrower costs would “keep housing consumers on the sideline, preventing the absorption of our nation’s large real-estate owned inventory, as well as curtailing refinance activity,” the letter said. It will also hinder necessary reforms to Fannie Mae and Freddie Mac, it said.

‘Pretty Excited’

While Senate Majority Leader Mitch McConnell, a Kentucky Republican, told reporters he was “pretty excited” about the bipartisan agreement that paved the way for the bill, Crapo and Warner asked him in the letter to live up to the earlier budget resolution, which prohibits the use of guarantee fees charged by Fannie Mae and Freddie Mac to offset government spending.

The Senate is still working on the long-term highway funding plan even as key House Republicans have opposed it and Democratic Leader Nancy Pelosi said there isn’t enough time left to weigh the plan before the funding expires.

http://www.bloomberg.com/news/articles/2015-07-23/highway-detour-of-fannie-fees-may-kill-gse-reform-senators-say