H.R.258 - To cancel certain proposed changes to loan level price adjustments by the Federal National Mortgage Association and credit fees charged by the Federal Home Loan Mortgage Corporation. (119th Congress)
Summary
H.R. 258 aims to nullify specific changes to loan level price adjustments (LLPAs) by the Federal National Mortgage Association (Fannie Mae) and credit fees charged by the Federal Home Loan Mortgage Corporation (Freddie Mac). These changes, announced by the Federal Housing Finance Agency (FHFA) on January 19, 2023, and detailed in Lender Letter LL-2023-01 and Bulletin 2023-1, would be cancelled if this bill is enacted.
The bill seeks to prevent the implementation of these adjustments, effectively maintaining the existing pricing framework for single-family mortgages. The intended outcome is to stabilize the housing market and potentially make homeownership more accessible.
Introduced in the House of Representatives by Mrs. Bice, the bill has been referred to the Committee on Financial Services for consideration.
Expected Effects
If enacted, H.R. 258 would prevent Fannie Mae and Freddie Mac from implementing the proposed changes to loan level price adjustments and credit fees.
This would likely result in a continuation of the existing pricing structure for single-family mortgages, potentially impacting the cost of borrowing for homebuyers. The cancellation of these changes could influence the housing market by affecting affordability and access to credit.
The FHFA announcement and related documents would have no legal effect.
Potential Benefits
- Potentially lower borrowing costs for some homebuyers, making homeownership more accessible.
- Stabilization of the housing market by preventing abrupt changes to mortgage pricing.
- Reduced uncertainty for lenders and borrowers regarding loan level price adjustments.
- May prevent unintended consequences of the proposed changes on specific borrower segments.
- Could help maintain current levels of housing affordability, especially for first-time buyers.
Most Benefited Areas:
Potential Disadvantages
- May limit the ability of Fannie Mae and Freddie Mac to manage risk through targeted pricing adjustments.
- Could potentially lead to higher overall costs for all borrowers if the cancelled adjustments were designed to address specific risk factors.
- May hinder the FHFA's ability to adapt the housing finance system to changing market conditions.
- Could create market distortions if the cancelled adjustments were intended to correct existing imbalances.
- Potentially delays modernization of the single-family pricing framework.
Constitutional Alignment
This bill falls under the legislative powers granted to Congress in Article I, Section 1 of the US Constitution, which vests all legislative powers in a Congress consisting of a Senate and House of Representatives. The bill directly addresses financial regulations and the oversight of government-sponsored enterprises, areas traditionally within the purview of congressional authority.
There are no apparent conflicts with specific constitutional provisions, such as the Bill of Rights. The bill does not infringe upon individual liberties, rights, or privacy.
However, the constitutionality hinges on whether the proposed changes by the FHFA exceed their delegated authority, a matter of statutory interpretation rather than direct constitutional conflict.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).