Setting and Using GSE Fees

Fees and charges imposed by the government-sponsored enterprises, Fannie Mae and Freddie Mac (the GSEs), such as loan-level price adjustments (LLPAs), arbitrarily increase costs to creditworthy borrowers.  GSE fees should be based on transparent actuarial analysis of the mortgage credit risks being incurred and should fully reflect the risk-reducing benefits of MI.  LLPAs should be reduced or eliminated to reflect the credit risk that is covered by MI on low down payment loans.  When the risk-reducing benefits of MI are not factored into GSE fees, consumers are charged twice for the same risk reduction.  This double charging is particularly burdensome for low- and moderate- income and first time homebuyers.

Further, USMI opposes the use of GSE fees to finance unrelated expenses, which imposes undue and unnecessary costs on current and future homeowners.

LLPA Letter (June 22, 2016)



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