FHFA rescinds controversial debt-to-ratio fee change for home loans
Fannie, Freddie increasing ‘debt’ fees on borrowers this summer
“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,” Director Sandra L. Thompson said in a statement released Wednesday, May 10. “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.”, explaining how certain borrowers would be charged a 0.
Robert Broeksmit, president and CEO of the Mortgage Bankers Association, was among industry leaders who asked Thompson to reconsider the DTI fee change.that beseeched the agency to come up with a better plan on so-called loan-level pricing fees. “To start, tying an LLPA to a DTI ratio would pose a multitude of operational issues, and compliance challenges, and also create a frustrating and confusing borrower experience,” he wrote.
“Imagine being a borrower who is quoted one rate when applying for a loan, then getting near closing and hearing from your lender that, due to a slightly slower month at work or a higher homeowner’s insurance premium, the cost of your loan will have to go up because you exceeded FHFA’s DTI threshold,” the blog post continued.
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