Friday, December 23, 2011

President Signs Legislation Extending Payroll Tax Holiday and Increasing Fee Charged by GSEs on Mortgage-Backed Securities

President Obama has signed the Temporary Payroll Tax Cut Continuation Act, HR 3675, extending the payroll tax holiday for two months and increasing the guarantee fees charged by Fannie Mae and Freddie Mac for assuming the risk of mortgage-backed securities.

The legislation increases the guarantee fees that are charged to mortgage lenders with respect mortgage-backed securities by Fannie Mae and Freddie Mac by 10 basis points. An enterprise cannot offset the cost of the fee to mortgage originators, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner. Revenue generated by the increase is deposited directly into the United States Treasury.