FHFA's Cancels August 1 LLPA Fee Increase
May 12, 2023
On Wednesday, May 10, following significant urging from the National Association of REALTORS®, the Federal Housing Finance Agency (FHFA) rescinded its proposed loan level pricing adjustment (LLPA) upfront fee on borrowers with debt-to-income ratios greater than 40 percent that was slated to go into effect August 1st. In the wake of this announcement, NAR President Kenny Parcell issued the following statement:
"We are pleased that our advocacy efforts on behalf of our 1.5 million members and their clients were successful. We applaud the FHFA for listening to the industry's concerns by choosing to drop this fee on borrowers with higher debt-to-income ratios. It would have imposed a cost on borrowers at a time in the market when affordability is already stretched and only made them riskier.
"NAR has worked with the FHFA to shape the LLPAs since their inception in 2008. We look forward to a thoughtful and deliberate process for the public, industry, and regulators to clarify misconceptions and to arrive at the best policy for home buyers and the market."
NAR previously wrote the FHFA urging it to require factors such as higher credit scores or larger down payments to offset this risk in lieu of higher fees that would only raise the borrower's risk of default. The FHFA also announced that a request for input (RFI) on an LLPA increase on borrowers with credit scores over 680 and down payments from 5% to 25% would be issued and information gathered from industry, consumers, academics, and private market experts.
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The National Association of Realtors® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.
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The Greater Rome Board of REALTORS® (GRBOR) Market Brief is compiled by Georgia Multiple Listing Service (GAMLS).For more information on details of this month's report, please contact the Board at 404.845.4025.
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