Statement: FHFA’s Announcements Regarding GSE Pricing, Credit Scores and Appraisal Data
WASHINGTON — USMI issued the following statement on the Federal Housing Finance Agency’s (FHFA) announcements to (1) change the government-sponsored enterprises’ (GSEs), Fannie Mae and Freddie Mac, guarantee fee (g-fee) pricing by eliminating upfront fees for certain borrowers and affordable mortgage products; (2) validate and approve both the FICO 10T and VantageScore 4.0 credit score models for use by the GSEs; and (3) publish its new Uniform Appraisal Dataset (UAD) Aggregate Statistics Data File:
“USMI commends FHFA for its ongoing review of the GSEs’ pricing frameworks, particularly the appropriateness of upfront fees on loans with private mortgage insurance risk protection. The private MI industry has a 65-year history of facilitating affordable access to low down payment lending. With over $1.4 trillion of insured mortgages focused on serving low down payment borrowers, who are often first-time buyers, low- to moderate-income, and minorities, USMI’s members look forward to continuing to work with FHFA and the GSEs to responsibly and sustainably expand access to homeownership.
“We also appreciate Director Thompson’s work to modernize credit scoring in a manner that balances access to credit and the safety and soundness of the housing finance system. The private MI industry is committed to engagement with FHFA, the GSEs, lenders, and other industry stakeholders to ensure a smooth implementation to promote efficient market operations and borrowers’ continued access to mortgage financing.
“Finally, USMI supports FHFA’s public release of appraisal data to begin to democratize this vitally important information. Access to this data will improve market participants’ operations, inform risk management practices, and generally strengthen the U.S. housing finance system.”
USMI has previously called for FHFA to reexamine and reform g-fees, particularly loan-level price adjustments (LLPAs), in numerous letters and columns. USMI has also encouraged FHFA to implement “data democratization” in its response to the agency’s request for information on appraisals submitted in February 2021.
U.S. Mortgage Insurers (USMI) is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.