Waukesha Times

WASHINGTON, DC – On June 23, House Republicans passed H.R. 3564, the Middle Class Borrower Protection Act, legislation to cancel recent changes made by the Federal Housing Finance Agency (FHFA) to increase fees on mortgages for borrowers with high credit scores to subsidize those with lower credit scores.

"House Republicans stand against President Biden's socialist vision of using big government to rig the system against middle-class Americans, said Congressman Scott Fitzgerald. Those who have worked hard to maintain good credit should not be penalized with higher interest rates and fees, all so that the President can appease some of his most liberal and ardent supporters. I'm proud to have voted to reverse this disastrous policy that if not overturned could have lasting damage on Wisconsin housing markets.”

Background

In January of 2023, FHFA announced a set of mandated changes to the Loan Level Pricing Adjustment pricing grid affecting the vast majority of single-family purchase and rate-term refinance loans backed by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. These changes altered the structure of the LLPAs, which are one-time upfront fees charged to lenders when the GSEs purchase their loans.

LLPAs get passed on from lenders to borrowers in the form of higher interest rates. FHFA’s changes both increased fees for many higher credit quality borrowers (half of all borrowers with FICO scores over 680) while decreased fees for 90 percent of lower credit quality borrowers (those under 680 FICO) regardless of how much of a down payment they made. 

Original source can be found here.