There is a tug-of-war in Congress over a bill that would reduce up-front fees for homeowners with Fannie Mae and Freddie Mac loans who wish to refinance and eliminate appraisal costs. While Democrats argue this will save homeowners thousands of dollars a year in mortgage payments, Republicans say the best way for the housing market to grow is for the government to scale back its role.

Under the proposed legislation, almost 12 million Fannie Mae and Freddie Mac mortgage holders are eligible for refinancing and, according to President Obama, it would save the average homeowner $3,000 a year. The Democrats are joined by the Mortgage Bankers Association, the National Association of REALTORS and the National Association of Home Buyers in support of the bill.

Republicans — most notably Rep. Randy Neugebauer of Texas, a member of the House Financial Services Committee — cited Fannie Mae and Freddie Mac as examples of government programs that have failed. He says that $190 billion of taxpayer-funded money has gone to the government-based lenders and only contributed to the weakening of the housing market.

The Senate, which is controlled by the Democrats, is expected to pass the bill, but the GOP-led House of Representatives will look for ways to keep it from reaching the president’s desk. Stay tuned!