Thompson: Updated rates structure doesn’t punish debtors with greater credit rating  

Federal Housing Finance Agency Director Sandra Thompson today safeguarded current actions by the FHFA to change its single-family rates structure. During a House Financial Services Committee oversight hearing, Thompson highlighted that “under the new pricing framework, borrowers with strong credit profiles are not being penalized to benefit borrowers with weaker credit profiles. That is simply not true.”

Thompson highlighted that “the enterprises’ capital requirements include recognition for loans with [mortgage insurance]to reflect lower exposure to unexpected losses. This dynamic is also reflected in the enterprises’ pricing framework. MI costs must be added to the guarantee fees charged by the enterprises to fully understand the costs borne by the borrower. Factoring in MI costs and risk transfer is critical to the fee calculation.” 

FHFA previously this year presented revamped and recalibrated in advance charge matrices for purchase, rate-term re-finance and cash-out re-finance loans. Recently, following advocacy from ABA and others, the company rescinded a questionable debt-to-income ratio-based charge, an in advance charge that belonged to the more comprehensive modifications. FHFA has actually likewise put out an ask for details on GSE rates, and the American Bankers Association will discuss the demand.

In a declaration sent for the hearing record, the association likewise articulated concepts for reform of the government-sponsored business, the thorough evaluation of the Federal Home Loan Banks that FHFA is presently carrying out and dealing with concerns concerning appraisals and assessments and loss mitigation and loan maintenance.