U.S. House of Representatives passed legislation this week that reverses actions taken by the Biden administration on the Loan-Level Price Adjustment (LLPA) mortgage rule.
The Middle-Class Borrower Protection Act of 2023 would restore the former LLPA mortgage structure and roll back new fee changes made by the Federal Housing Finance Agency (FHFA) based on the debt-to-income (DTI) of borrowers. It also institutes a temporary one-year freeze in FHFA’s ability to make new LLPA fee changes.
“The Biden administration wants to use mortgage fees to put their finger on the scale and decide who gets to pay more and who gets to pay less,” Rep. Patrick McHenry (R-NC), chair of the House Financial Services Committee, said. “This will make housing less affordable, not more, and puts taxpayers at risk by threatening the safety and soundness of our housing finance system. Nearly 95 percent of Americans nationwide have credit scores over 680 and almost half of those borrowers will face an extra $1.8 billion in new fees over the next two years under the Biden administration’s plan.”
The bill was sponsored by Rep. Warren Davidson (R-OH), chair of the House Subcommittee on Housing and Insurance.
“Responsible action should never be penalized, and irresponsible action should never be subsidized,” Davidson said.
The bill passed 230-189.