I 112th CONGRESS 1st Session H. R. 1222 IN THE HOUSE OF REPRESENTATIVES March 29, 2011 Mr. Neugebauer (for himself, Mr. Bachus, Mr. Garrett, Mr. Pearce, and Mr. Hensarling) introduced the following bill; which was referred to the Committee on Financial Services A BILL To increase the guarantee fees charged by Fannie Mae and Freddie Mac with respect to mortgage-backed securities guaranteed by such enterprises.

1.

Short title

This Act may be cited as the GSE Subsidy Elimination Act of 2011.

2.

GSE guarantee fees

Subpart A of part 2 of subtitle A of title XIII of the Housing and Community Development Act of 1992 is amended by adding after section 1326 (12 U.S.C. 4546) the following new section:

1327.

Enterprise guarantee fees

(a)

Increase

Subject to subsection (b), the Director shall require each enterprise to charge a guarantee fee in connection with any guarantee, issued by the enterprise on or after the expiration of the 2-year period beginning on the date of the enactment of this section, of the timely payment of principal and interest on securities, notes, and other obligations based on or backed by mortgages on residential real properties designed principally for occupancy of from one to four families, in an amount that the Director determines appropriately reflects risk of loss as well the cost of capital allocated to similar assets held by other fully private regulated financial institutions. (b)

Phase-In

The Director shall provide for compliance with subsection (a) by requiring each enterprise to increase the guarantee fee charged by the enterprise gradually during the period beginning on the date of the enactment of this section and ending upon the date specified in such subsection in a manner sufficient to comply with such subsection. In determining a schedule for such increases, the Director shall— (1)provide for uniform pricing among lenders; (2)provide for adjustments in pricing based on risk levels; and (3)take into consideration conditions in financial markets. (c)

Definition of guarantee fee

For purposes of this section, the term guarantee fee means a fee described in subsection (a). Such term includes— (1)the guaranty fee charged by the Federal National Mortgage Association with respect to mortgage-backed securities; and (2)the management and guarantee fee charged by the Federal Home Loan Mortgage Corporation with respect to participation certificates.

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