In a letter to the Federal Housing Finance Agency, ABA and several other consumer, housing and banking groups called on the Federal Housing Finance Agency to reduce or eliminate the loan-level price adjustments charged by Fannie Mae and Freddie Mac. With the increase since 2009 in guarantee fees charged to lenders, the GSEs have seen substantial gains in income “without achieving broad access to credit,” the letter said.
LLPAs can account for up to 4% of the total loan value, resulting in “arbitrarily high prices for mortgage credit,” especially for lower-income and first-time homebuyers. Signatories to the letter included a broad coalition of groups that do not always see eye-to-eye on policy issues, from banking and credit union trade groups to the Center for Responsible Lending, the NAACP and the National Council of La Raza.
Read the letter.