Mortgage brokers are worried about the LLPA bill changes

Of the Federal Housing Finance Agency this week a series of significant changes in loan pricing adjustment (LLPA) bills sue b Fannie Mae and Freddie Mac on standard/conventional mortgages.

Concerns are being raised among mortgage and real estate agencies, who fear it will hurt qualified borrowers amid an ongoing cost crisis. .

The changes include updates to prices for second homes, high-end loans and refinancing first notice in 2022. The agency is also promoting a “renaissance” LLPA matrix Pricing varies by loan purpose, with criteria for loan purchases, loan repayment limits, loan refinancing expenses and other LLPA additions through approvals. The debt-to-income ratio is now a consideration in the cost-benefit ratio, with a new cost change for borrowers with a DTI ratio of 40%.

The changes will take effect on May 1, 2023.

In a statement, FHFA Director Sandra Thompson said the changes will strengthen the “safety and soundness” of Fannie Mae and Freddie Mac by “enhancing their ability to improve their financial condition.” basis over time.”

The LLPA changes establish reduced or waived fees for first-time home buyers and those with low and moderate incomes. It also includes a significant down payment for borrowers with low credit scores and strong down payments.

But there are also some losers. There are big increases in LLPA fees for many “pay-out” loans, and entrepreneurs will pay higher fees, according to the four new price list.

The street borrower will also resent the high fees. With the FHFA creating new bonds for borrowers in the highest categories, borrowers with FICO scores between 720-739 and 740-759 will pay more in fees. LLPA – sometimes thousands of dollars more.

“The interest rate hikes on some borrowers with good credit scores and moderate down payments will hit homebuyers in the economy,” the National Association of Realtors (NAR) noted in a statement Thursday. “In addition, the FHFA included new fees on borrowers with higher debt to income.

“With a three-percent increase in mortgage rates, now is not the time to raise fees on home buyers,” NAR said. “Furthermore, FHFA needs to address its recent increase in fees on high-end home buyers as well as collateral fees that affect all home buyers. Home buyers are hurting and these changes are overdue. Now is the time.”

Of the Mortgage Bankers Association expressed similar sentiments, stating that the new framework is likely to raise overall prices, a concern in today’s slow housing market.

“With the height of the home buying season coinciding with these changes, FHFA should consider additional program changes to improve affordability, including raising the minimum cost of earnings of the GSEs,” said Bob Broeksmit, president and CEO of the trading division. “This action will expand the ability for borrowers who can meet the monthly mortgage payment but do not have significant savings to make a very low payment.”

MBA urged FHFA to delay implementation to allow lenders to incorporate updates and reclassify the pricing structure. in the weather.

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