On May 10, The Federal Housing Finance Agency (FHFA) said it rescinded the upfront fees based on borrowers’ debt-to-income (DTI) ratios for loans acquired by Fannie Mae and Freddie Mac, according to the National Mortgage Professional. The federal agency said it will also issue Request for Input on the government-sponsored enterprises’ (GSE) single-family pricing framework.
The FHFA announced in March it would delay implementing the fees in order to engage with industry stakeholders and better understand their concerns.
“I appreciate the feedback FHFA has received from the mortgage industry and other market participants about the challenges of implementing the DTI ratio-based fee,” FHFA Director Sandra Thompson said. “To continue this valuable dialogue, FHFA will provide additional transparency on the process for setting the Enterprises’ single-family guarantee fees and will request public input on this issue.”
Consistent with the Enterprise Regulatory Capital Framework finalized in 2020, appropriately capitalizing each GSE is critical to ensuring they are well positioned to meet their mandate of providing liquidity and stability to the secondary mortgage market and supporting access to affordable mortgage credit throughout the nation, the FHFA said.
In addition, FHFA said additional details about the upcoming Request for Input (RFI) on the single-family guarantee fee pricing framework would be released.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), issued the following statement after the FHFA announcement.
“We have strongly opposed FHFA’s planned debt-to-income loan-level pricing adjustment since it was announced in January, and have led advocacy efforts calling for its removal,” he said. “The proposed fee was unworkable for lenders and would have confused borrowers and undermined the customer experience. We are pleased that FHFA engaged with industry stakeholders, recognized the negative impacts of the fee, and decided to rescind its implementation.
“The MBA ‘urges FHFA to continue its engagement to improve clarity and transparency regarding the GSEs’ pricing framework. We will continue our work with the agency, the GSEs, lawmakers, and the Biden administration on policies and actions that lower costs and advance sustainable access to homeownership while protecting taxpayers’,” Broeksmit added.