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Payroll Tax Cut Extension Forgoes G-Fee Hike

After months of wrangling, the House and Senate passed a permanent payroll tax cut extension Friday without imposing controversial guarantee fees for lenders with government-backed mortgages.

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The House passed the ""bill"":http://docs.house.gov/billsthisweek/20120213/CRPT-112hrpt-HR3630.pdf, reportedly worth $100 billion, by a margin of 293 to 132 before the Senate cleared it by a vote of 60 to 36.

Partisanship on Capitol Hill stalled the extension last fall, prompting both chambers of Congress to field a temporary

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two-month extension for taxpayers in December.

Lawmakers paid for the extension in part by hiking fees on loans backed by ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ by 10 basis points.

The move netted criticism from various trade groups claiming that homeowners and the economy at large would shoulder any increase in guarantee fees for lenders.

In letter addressing lawmakers from either party, ""David Stevens"":http://www.mbaa.org/DavidStevens.htm, president and CEO of the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm, said that the payroll tax reduction ""would provide the average American $160 in tax relief over the next 60 days,"" adding that any increase in guarantee fees would ""cost that same borrower more than $4,000 over the life of their 30-year loan, clearly a net negative for most consumers.""

""Just as we are beginning to see modest signs of improvement in scattered housing markets across the nation where employment is gaining and consumer confidence is rising, Congress is tampering with g-fees and needlessly raising the cost of buying a home,"" Bob Nielsen, chairman of the ""National Association of Home Builders"":http://www.nahb.org/, said in a separate statement.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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