The Senate over the weekend added an increase in FHA premiums to the payroll tax bill, passing the measure by an overwhelming margin of 89-10.
The language was added to the bill after heavy lobbying from the mortgage insurance industry which feared that a 10 basis point g-fee hike for Fannie Mae and Freddie Mac MBS would tilt the market toward FHA loans.
The final bill now includes g-fee hikes for Fannie and Freddie, and a premium increase for FHA.
The MIs pushed for the FHA premium hike, claiming the agency would have a competitive advantage and field more business if the g-fees for Fannie and Freddie MBS are raised without a corresponding increase in FHA premiums.
Ginnie also provides a securitization outlet for Department of Veteran Affairs, and Rural Housing Service guaranteed loans. Meanwhile, House Republicans are balking at approving the Senate bill because it only extends the payroll tax holiday for two-months.
House Speaker John Boehner, R-Ohio, said his members want a full-year extension, which means the bill might have to be rewritten and passed before the current payroll tax holiday expires at the end of this month.
The move by the House leader has clouded the outlook for passage of the payroll tax cut.
