The Federal Housing Finance Agency (FHFA) has rescinded the upfront fees based on the borrowers’ debt-to-income (DTI) ratios for loans acquired by Fannie Mae and Freddie Mac.
This follows an announcement in March by FHFA that it would delay implementation so it could 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, Thompson said it is critical to ensure that the enterprises are well positioned to meet their mandate of providing liquidity and stability to the secondary mortgage market and supporting access to affordable mortgage credit.
The Mortgage Bankers Association (MBA) said it was pleased that FHFA engaged with industry stakeholders and rescinded its implementation.
“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. The proposed fee was unworkable for lenders and would have confused borrowers and undermined the customer experience,” Bob Broeksmit, president and CEO of the MBA, said. “MBA urges FHFA to continue its engagement to improve clarity and transparency regarding the GSEs’ pricing framework.”
FHFA said it will release additional details about the upcoming request for input (RFI) on the single-family guarantee fee pricing framework shortly.