Georgia Governor Brian Kemp and Missouri Governor Mike Parson recently led a group of Republican governors in sending a letter to the Federal Housing Finance Agency (FHFA) in regard to the agency’s changes to the loan level pricing adjustment (LLPA).
The Biden Administration’s Federal Housing Finance Agency (FHFA) implemented a new rule that disincentivizes good credit behavior and punishes responsible Americans.
We’re leading the charge with 17 other Republican governors to stand up for hardworking Americans and oppose… pic.twitter.com/n5Rl7vq7BB
— Brian Kemp (@BrianKempGA) June 6, 2023
At the beginning of this year, on January 19, the FHFA announced its intent to re-write the single-family pricing framework for the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac beginning on May 1, 2023.
The new pricing framework, the Republican governors argue, inverts the risk financing structure at the GSEs, which will ultimately “increase mortgage costs for lower-risk individuals and handicap those borrowers with larger down payments.”
The governors further argue that the “wrong and unreasonable” changes “provide no incentive to borrowers to maintain good credit and will confuse borrowers at all credit levels.”
“Your actions are threatening the American housing system. By upending the existing financing model that relies on individual financial responsibility, you are increasing uncertainty in the housing market and our nation’s economy,” the letter states.
“As governors, we promote hard work, accountability, fairness, and opportunity for all our citizens. The LLPA mandates blatantly contradict these goals. Therefore, we request you rescind the updated LLPA immediately. If you are unwilling to do so, Congress must take action,” the letter concludes.
The letter was sent to both President Joe Biden and FHFA Director Sandra Thompson.
In addition to Kemp from Georgia and Parson from Missouri, the governors from Alabama, Arkansas, Idaho, Indiana, Iowa, Mississippi, Montana, Nebraska, Nevada, New Hampshire, Ohio, South Dakota, Tennessee, Texas, Utah and Wyoming signed the letter.
In a social media post, Kemp called the letter an effort to “stand up for hardworking Americans and oppose these actions that threaten America’s housing system.”
– – –
Kaitlin Housler is a reporter at The Georgia Star News and The Star News Network.
