BY: KATY O’DONNELL | 05/10/2023 01:02 PM EDT | UPDATED 05/10/2023 03:43 PM EDT
The Federal Housing Finance Agency is rescinding a plan to require Fannie Mae and Freddie Mac to raise guarantee fees for high-cost loans.
Fannie and Freddie were due to start charging fees between 0.25 percent and 0.75 percent higher for mortgages with high debt-to-income ratios in August.
The agency — which had already delayed implementation of the new fee structure — said the move was a response to pushback from the mortgage industry.
“I appreciate the feedback FHFA has received from the mortgage industry and other market participants about the operational challenges of implementing the DTI ratio-based fee,” FHFA Director Sandra Thompson said in a statement Wednesday.
“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,” Thompson said.
The agency said it would shortly release more details on a forthcoming request for input on the fee pricing framework for single-family home loans.
House Republicans — who have hammered Thompson over recent pricing adjustments — welcomed the move but called on her to also rescind a controversial fee increase on certain high-credit score borrowers to subsidize those with lower credit scores, a change that took effect this month.
“I’m glad to see the FHFA rescind its unworkable changes to debt-to-income ratio-based fees,” House Financial Services Chair Patrick McHenry of North Carolina said in a statement.
“Director Thompson should have done the same with FHFA’s changes to the upfront Loan-Level Pricing Adjustment fees that went into effect on May 1st, but she did not,” McHenry added. “Instead, Congress will now take action to end this tax on creditworthy borrowers.”
McHenry warned Thompson in a letter last month that the committee was “prepared to take action to repeal [the credit-score fee change] legislatively and reconsider the parameters of FHFA’s authority under statute to mandate any similar pricing changes going forward.”