The lower interest rates drop, the more tempting it is for the federal government to add a few basis points to Guarantee fees, or G-Fees, allowing for an increase in loan payments. For example, President Trump’s most recent budget proposal included a lowering of G-Fees. Recently, however, the American Bankers Association, the National Association of Realtors, the Mortgage Bankers Association and two dozen other industry groups wrote a letter to Congress advocating against such practices. “We firmly believe that g-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses,” the groups wrote.
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