FHFA Announces Rescission of DTI-Based Fees

The Federal Housing Finance Agency (“FHFA”) announced yesterday that it was rescinding its controversial plan to implement loan level pricing adjustments (“LLPA”) for borrowers with debt-toincome ratios of 40% or higher.

While the FHFA initially indicated the changes were designed to make home buying more affordable for first time and low-income borrowers, the proposal was met with strong opposition from consumer groups as well as the mortgage industry.

Bob Broeksmit, Mortgage Bankers Association President and CEO, issued the following statement:

We have strongly opposed FHFA's planned debt-to-income loan level pricing adjustment since it was announced in January and have led advocacy efforts calling for its removal. The proposed fee was unworkable for lenders and would have confused borrowers and undermined the customer experience. We are pleased that FHFA engaged with industry stakeholders, recognized the negative impacts of the fee, and decided to rescind its implementation.

The changes were originally set to become effective May 1, 2023, but were delayed until August 1, 2023, before yesterday’s decision to rescind the new pricing scheme in its entirety.

To read the FHFA Announcement, please visit FHFA Announces Rescission of Upfront Fees Based on DTI.