Mortgage News May 17, 2023
The modifications made by the Federal Housing Finance Agency to Fannie Mae’s and Freddie Mac’s pricing model for single-family homes remain a topic of controversy. Despite a recent report indicating that the changes do not impose a burden on the affluent to support the less affluent, Republican lawmakers in Congress have introduced legislation to revoke them.
Last week, two Republican members of the House introduced individual bills to reverse the changes, citing it as the reason. On April 26, Representative Stephanie Bice, who is also the vice chairwoman of the Republican Main Street Caucus, introduced the “Free Market Mortgage Act of 2023.” Although the bill’s language is not yet accessible, congress.gov has posted information indicating that H.R. 2876 aims to nullify the Federal National Mortgage Association’s proposed modifications to loan level price adjustments and the Federal Home Loan Mortgage Corporation’s credit fees.
Fannie Mae refers to the Federal National Mortgage Association, whereas Freddie Mac stands for the Federal Home Loan Mortgage Corporation.
Although the language of Bice’s legislation is not yet available, it has already garnered 19 Republican co-sponsors and has been referred to the House Committee on Financial Services.
In an interview with Fox News, Bice explained that she introduced the bill because “it is unfair to penalize individuals who have made prudent financial choices, and the government should not encourage the reduction of credit scores.”
The following day, on April 27, Representative Andy Biggs, a Republican from Arizona, introduced the “Responsible Borrowers Protection Act,” also lacking any language. H.R. 2928 seeks to nullify specific proposed changes to the credit fees of Fannie Mae and Freddie Mac, among other things.
Like Bice’s bill, Biggs’ legislation has been referred to the Financial Services Committee and has the backing of 35 Republican co-sponsors.
In a press release, Biggs declared that his bill “will prevent the implementation of the new fees.” However, the new pricing model was officially put into operation on May 1.
Biggs went on to assert that “the Biden administration’s recent attempt to establish fairness in the housing market is repugnant and goes against American values.” He further argued that individuals with outstanding credit ratings should not face punitive measures for being responsible, nor should they be compelled to shoulder more financial responsibilities due to the fiscal imprudence of others.
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