FHFA Rescinds Problematic Proposed Upfront Fees Based on Debt-To-Income Ratio
In January, the Federal Housing Finance Agency (FHFA) announced a new fee for borrowers with debt-to-income (DTI) ratios at or greater than 40 percent on loans acquired by Fannie Mae and Freddie Mac. The housing industry strongly opposed this DTI ratio-based fee. The fee would be difficult for lenders to implement and confuse borrowers with potential pricing changes throughout the loan application process. The fee was scheduled to take effect on Aug. 1.
In response to industry concerns, on May 10, FHFA announced it rescinded this loan fee on borrowers with a DTI ratio greater than 40 percent.
In its press release, FHFA Director Sandra Thompson called the feedback from the industry valuable and said that to continue the 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.”
The press release further states that details about the upcoming Request for Input (RFI) on the single-family guarantee fee pricing framework will be released shortly.
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