{"id":7103,"date":"2023-04-28T17:25:34","date_gmt":"2023-04-28T21:25:34","guid":{"rendered":"https:\/\/nationalfairhousing.org\/?p=7103"},"modified":"2023-05-01T16:47:25","modified_gmt":"2023-05-01T20:47:25","slug":"leading-civil-rights-and-housing-groups-support-fhfas-critical-updates-to-the-mortgage-pricing-framework","status":"publish","type":"post","link":"https:\/\/nationalfairhousing.org\/leading-civil-rights-and-housing-groups-support-fhfas-critical-updates-to-the-mortgage-pricing-framework\/","title":{"rendered":"Leading Civil Rights and Housing Groups Support FHFA\u2019s Critical Updates to the Mortgage Pricing Framework"},"content":{"rendered":"\n

FOR IMMEDIATE RELEASE
April 28, 2023
Contact: Izzy Woodruff | iwoodruff@nationalfairhousing.org<\/a><\/p>\n\n\n\n

Leading Civil Rights and Housing Groups Support FHFA\u2019s Critical Updates to the Mortgage Pricing Framework<\/strong><\/p>\n\n\n\n

Pricing Framework is an Important Initial Step in the Right Direction to<\/em> Advance Fair and Affordable Housing and Strengthen Communities<\/em><\/p>\n\n\n\n

Washington, D.C. \u2014<\/strong> Today, leading civil rights and housing policy organizations issued the following statement supporting the Federal Housing Finance Agency (FHFA)\u2019s pricing framework.<\/p>\n\n\n\n

\u201cWe commend Director Thompson and FHFA for recent updates to the mortgage pricing framework that represent a critical first step in the journey to create a more equitable system for creditworthy borrowers. The updates help address persistent gaps in wealth and homeownership while also improving safety and soundness for Fannie Mae and Freddie Mac (collectively, the ‘Enterprises’). It is unfortunate that recent inaccurate criticism of the updates has been issued without the context of data, analysis, or history.<\/p>\n\n\n\n

\u201cThis year we commemorate 55 years of the Fair Housing Act. Yet in 2023, residential segregation, housing discrimination, and an affordable housing crisis remain at the core of inequality in the United States. When Congress passed the Fair Housing Act in 1968, it intended for federal agencies such as FHFA to take active steps to end housing discrimination, eliminate housing segregation and its ill effects, and dismantle systemic racism and inequality to ensure people could have safe and decent housing in vibrant communities. Also, Congress mandated that the Enterprises support mortgages on housing for low- and moderate-income families that are responsibly underwritten but may generate lower returns than other products.<\/p>\n\n\n\n

\u201cDespite these congressional mandates, in the wake of the 2008 financial crisis, FHFA required the Enterprises to charge lenders upfront guarantee fees known as Loan Level Pricing Adjustments (LLPAs), which were based on certain attributes of the borrower or the loans (e.g., loan-to-value\/credit-score grid, cash-out refinance, investor properties, secondary financing at origination, jumbo conforming loan). The LLPA pricing framework had a disproportionate impact on borrowers of color and was inherently unfair as it placed the burden of the Enterprises\u2019 financial recovery and future catastrophic risk on borrowers of color, even though they were the victims of the financial crisis, not the cause. Black and Latino communities lost $<\/a>1 trillion<\/a> in wealth to unnecessary foreclosures after being targeted for abusive and unsustainable mortgages<\/a> leading up to the 2008 Housing Crisis<\/a>. Asian American and Pacific Islanders and other communities of color were also devastated by toxic subprime loans. Moreover, the Financial Crisis Inquiry Commission<\/a> found that the crisis was driven by financial institutions\u2019 appetite for excessive profits and lax regulation. Our organizations urged the Biden-Harris administration to prioritize restoring safe, fair, and inclusive mortgage pricing to promote equitable housing as well as safety and soundness.<\/p>\n\n\n\n

\u201cAfter careful review, FHFA took steps in the past 18 months to make incremental changes to the pricing framework, including:<\/p>\n\n\n\n