JEFFERSON CITY, MO – On Wednesday, Governor Mike Parson, joined by 17 other Republican Governors, co-led a letter to President Joe Biden opposing his Administration’s new rules that punish responsible homebuyers with increased mortgage fees.
“There is never a good time for bad policy, and this measure by the Biden Administration is certainly bad policy,” Governor Parson said. “This backward policy only serves to punish hard-working Americans who follow good financial practices, all while worsening overall housing market conditions. Only the Biden Administration would think it can solve a supply issue by subsidizing demand and bad credit.”
The new rules that the Federal Housing Finance Agency (FHFA) has adopted alter the Fannie Mae and Freddie Mac loan level pricing adjustment (LLPA) structure for borrowers seeking a mortgage. The changes ultimately provide lower borrowing fees to higher-risk borrowers and higher borrowing fees for lower-risk borrowers, punishing those Americans who have maintained a good credit rating and rewarding those who have not.
In the letter, the Republican Governors point out that this action by the Biden Administration comes during an inflation crisis that has required the Federal Reserve to increase interest rates 10 consecutive times in one year. As responsible homebuyers are already seeing interest rates go up, the Biden Administration is sending homebuying fees even higher.
The LLPA structure took effect on May 1, 2023. The Republican Governors call on President Biden to immediately rescind the misguided policy. Absent action by the White House, the Governors request that Congress take action to dismantle the harmful rules.