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Pennsylvania State Senate
06/01/2024 04:17 PM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?SPick=20230&chamber=S&cosponId=40655
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Senate of Pennsylvania
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted: May 3, 2023 10:21 AM
From: Senator Devlin J. Robinson and Sen. Kristin Phillips-Hill
To: All Senate members
Subject: Resolution Urging the FHFA to Rescind their Policy that Punishes Homebuyers with Good Credit
 
In the near future, we will be introducing a resolution urging President Biden and the Federal Housing Finance Agency to rescind their proposed updates to how mortgage rates are structured. 
 
On January 19, 2023, FHFA announced via press release its intent to re-write the single-family pricing framework for Fannie Mae and Freddie Mac. This announcement, which took effect on May 1, will invert the common-sense risk financing structure that was in place to decrease mortgage rates for riskier individuals with low credit scores. This would then forcibly raise rates for those who have played by the rules and have good credit.  
 
This policy will penalize the people who have done everything right, and they are Pennsylvanians who have built a good credit score and saved enough to make a strong down payment. Ironically, those who make down payments of 20 percent or more on their home will end up paying the highest fees. These fees will then be used to subsidize higher-risk borrowers by handing out better mortgage rates to people with lower credit ratings and who have saved less for a down payment.  
 
We can all agree that the issue of affordable housing is something that should be remedied. However, penalizing hardworking Pennsylvanians is not the way to do it. We should be implementing policies to reduce inflation, cut energy costs, and drive lower interest rates. Doing these things will enable families to save and improve their credit scores which will ultimately lead to buying a home. 
 
We urge both the President and the FHFA to prioritize ALL Pennsylvanians, regardless of their socio-economic standing, by creating an environment that rewards responsible financial behavior and to rescind this irresponsible policy.  
 
Please join us in cosponsoring this important resolution. 


Introduced as SR134