U.S. Sen. Tim Scott (R-SC) is seeking answers from the Federal Housing Finance Agency (FHFA) about its recent changes to mortgage financing.
Earlier this month, the FHFA launched a new pricing framework for Fannie Mae and Freddie Mac to “bolster safety and soundness, better ensure the Enterprises fulfill their statutory missions, and more accurately align pricing with the expected financial performance and risks of the underlying loans,” FHFA Director Sandra Thompson said. She described it as risk-based pricing, with some of the fees based on the risk characteristics of the borrowers.
In a letter to Thompson, Scott sought evidence from the agency to support Thompson’s claim that changes to mortgage financing will “more accurately align pricing with the expected financial performance and risks of the underlying loans.”
Scott, ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, said that the agency has provided no analysis to support this statement. Further, the senator expressed concern that previous actions under Thompson’s leadership have “muddied” the relationship between credit risk and credit scores.
“We have already seen how the Biden administration’s failed economic policies have spurred inflation and hurt markets,” Scott said. “I’m concerned that recent actions taken by Director Thompson simply create additional risk and could result in more families struggling to make homeownership a reality. The road to homeownership doesn’t end when you receive a mortgage—we must ensure that federal housing policy is risk-based and sustainable in the long run.”
Scott requested answers to a series of related questions, as well as a staff briefing, by May 19.