Trade Groups Criticize Payroll Tax Extension Bills

The House voted to send a payroll tax extension bill into a bicameral committee Tuesday, increasing uncertainty over whether Congress will include a pay-as-you-go provision that would hike fees on lenders originating mortgages backed by ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/.

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House Republicans by and large passed their version of the payroll tax extension 229-193, with many Democrats in opposition to the bill.

_The Hill_ reported sources saying that Senate Democrats believe the failure of their version to pass will place blame on House Republicans, and vice-versa.

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The Senate version of the legislation passed earlier this weekend with stipulations that would raise mortgage fees on lenders with GSE loans by one-tenth of 1 percent, and extend the payroll tax for two months, according to the newspaper.

Industry groups railed against the measure, saying that it would roll costs onto homeowners on the whole.

""The idea that you should pass a ten year tax increase for two months of payroll tax relief is appalling,"" ""David Stevens"":http://www.mbaa.org/DavidStevens.htm, president and CEO of the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm, said in a statement. ""Fannie and Freddie's guarantee fees are supposed to be used to help offset the risk inherent in providing mortgages, and any increases should be used for that purpose.

""Policy makers need to go back to the drawing board and come up with a thoughtful, comprehensive approach to paying for the payroll tax holiday, one that doesn't increase taxes by thousands of dollars on homebuyers, at a time when the housing market is already struggling,"" he added.

Bob Nielsen, chairman of the ""National Association of Home Builders"":http://www.nahb.org/default.aspx, added in a ""statement"":http://www.nahb.com/news_details.aspx?newsID=14351 more recently: ""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. This will jeopardize the tenuous rebound and is the last thing this economy needs.""