April, 2012

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THE LATEST ORIGINATION 'Responsibility Fee' Proposed for Big Banks White House pushes for a new fee structure for the nation's largest financial institutions. T he Obama administra- tion unveiled a budget for the next fiscal year that proposes levying fees for the nation's largest banks, selling off government-occupied real estate, and expanding services for the Fed- eral Housing Administration (FHA). The $3.8 trillion budget calls for a Financial Crisis Responsibility Fee to offset costs to the Troubled Asset Relief Program and mass refinance program. If passed by Congress, the fee would raise $61 billion from finan- cial institutions with $50 billion or more in assets over the next decade. The fee draws on recent themes from the Obama admin- istration, including narratives about economic justice and fair play in the American economy. President Barack Obama opened his budget proposal by describing a society in which the rich grew richer at the expense of lower classes just ahead of the financial crisis. He said that financial responsi- bility at the top helped contribute to the collapse of a "house of cards" in 2008, when consumers "who could not afford . . . or even understand" their mortgage loans could not pay them and "huge bets" by financial institutions "helped trigger the worst economic crisis since the Great Depression." The narrative of fair play belies the efforts of an administration that nonetheless continues to incorporate the ideas and principles of the political opposition, notably by touting reorganization and waste-reduction plans for the federal government. In addition to the fee for big banks, the Obama administration proposes selling off taxpayer- funded property and real estate around the country. The proposal claimed that more than 1.1 million buildings and structures remain wholly underutilized by the federal government and recommends selling off property to save taxpayers $3 billion by year-end 2012. Those who oppose the move reportedly suggest that a loss in demand for real estate owned or leased by the federal government will slam lenders and renters responsible for the properties. The budget also reaffirms a raise in premiums for FHA- backed loans to shore up the agency's undercapitalized Mutual Mortgage Insurance Fund, which carried only $2.6 billion in capital for more than $1 trillion in force for mortgages last year. Critics charge that the Obama administration risks the FHA's solvency with a recent proposal that would allow homeowners to refinance their private-label mort- gages into agency-insured loans. Rep. Paul Ryan (R-Wisconsin), chairman of the House Budget Committee and a vocal critic of the Obama administration, lambasted the budget in an inter- view with the Wisconsin Radio Network as one that would re- solve the federal deficit by raising taxes on the wealthy. "He's making it much more likely that people will not be able to count on these benefits they've orga- nized their lives around," Ryan said during the interview. "He's making it much more likely that we'll have bitter austerity in the near future." A statement by Financial Executives International drew on claims that the budget proposal "would harm American job creators as well." THE M REPORT | 41 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET

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