I really hate politics. In fact, I find the government so frustrating that I can't even watch House Of Cards because it upsets me too much (OK, it's fiction but a lot of how it depicts Washington is accurate). And I'm no fan of lobbying either so when the National Association of Realtors sends me their calls to action in order to help promote their realtor-friendly agenda I usually ignore their pleas. But they got my attention with their recent requests for help in removing a provision in the Transporation Reauthorization Bill that basically increases Fannie Mae and Freddie Mac guarantee fees to pay for highways.
I would have no problem with an increase in the guarantee fees if it was deemed necessary to cover the cost of the implicit government guarantee of those institutions. However, one of my chief gripes about government is that it constantly takes money from one pocket to pay for something that should be coming from a totally different pocket. In the process they totally screw up any market forces that would otherwise indicate where people really want their money to go. Basically they collect a bunch of money from thousands of sources, stick it in a blender, and then pour it back out into thousands of bottomless cups, spilling a lot in the process.
Case in point: some of the money collected from gasoline taxes goes towards mass transit, which is then underpriced, while the gasoline taxes are insufficient to pay for the highway programs. Meanwhile, congress doesn't have the guts to raise the gasoline tax - they haven't done so in 22 years -despite the fact that they want people to drive less and buy more fuel efficient cars. So then they pass other laws requiring car manufacturers to sell more fuel efficient cars, regardless of what the consumer really wants to buy.
So, for highway funds they look to other revenue sources, that are harder for voters to see, to make up the shortfall. One of those sources is the guarantee fees charged by Fannie and Freddie, which are themselves essentially subsidized by the government from other revenue sources. In fact, they received a huge subsidy when the government used general treasury funds to bail them out of the financial crisis. And of course the government really shouldn't be subsidizing housing in the first place.
Anyway, this bill is over 1000 pages long with 284 amendments so that gives you some idea what a quagmire it is. It's hard to quickly decipher what is going on in it but it looks to me like this provision has already been in there for a while - it's just that they want to extend the expiration date now. So if you want to voice your opposition to this you can go here: Stop Congress From Taking Money From Future Homeowners.
#FannieMae #FreddieMac #HighwayBill #Government
Gary Lucido is the President of Lucid Realty, the Chicago area's full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think he's the next Kurt Vonnegut you can Subscribe to Getting Real by Email. Please be sure to verify your email address when you receive the verification notice.