The Federal Housing Finance Agency has pushed back the implementation date of some of
Specifically, higher fees charged for mortgages with debt-to-income ratios above 40% will instead become effective Aug. 1, with no post-purchase adjustments applied through Dec. 31, 2023.
The DTI-based fees were part of a larger change to the two government-sponsored enterprises' pricing grids that raised lender fees for some mortgages with the intent of making other loans more accessible to a broader range of lower-income borrowers.
"FHFA has decided to delay the effective date of the DTI ratio-based fee by three months to August 1, 2023, to ensure a level playing field for all lenders to have sufficient time to deploy the fee," the agency said in a statement attributed to Director Sandra Thompson.
The news was met with mixed reactions given that some lenders have already begun working to implement the new pricing ahead of the deadline. MBA President Robert Broeksmit said a delay alone would not be sufficient to address all
"While we appreciate the delay, we are disappointed that FHFA's statement did not recognize the need to consider alternatives to using a debt-to-income pricing adjustment," Broeksmit said. "From the beginning, MBA has emphasized to the FHFA that DTI-based loan level price adjustments simply are not workable for lenders and borrowers alike. DTI can fluctuate throughout the mortgage application and underwriting process, and FHFA's new fees will inevitably lead to borrowers' costs changing between application and closing, requiring multiple redisclosures that will increase compliance costs and confuse borrowers.
"We will use the extra time offered by the change in the effective date to continue working with FHFA to explore alternatives that will not pose undue hardships on borrowers and lenders," he added.
The Community Home Lenders of America, a group that represents smaller and mid-sized lenders, also said it welcomed the move but would still like to see the FHFA go a step further and roll back the change entirely.
"CHLA very much appreciates this three-month delay by FHFA in pricing changes for GSE borrowers with higher debt-to-income ratios," Executive Director Scott Olson said in an emailed statement. "This delay will give IMBs more time to adjust to the complications created by this DTI pricing differential, and we continue to call on FHFA to reconsider this fee hike."
The FHFA said it, Fannie Mae and Freddie Mac "will continue to engage with industry stakeholders to address operational concerns."
Although a temporary exception regarding the DTI-based post-purchase adjustments will be in place between Aug. 1 and Dec. 31, the agency warned that it "will not alter any other quality control review decisions by the enterprises."
