Underwriting

The Home Loan banks are failing to serve huge numbers of Americans because of their reliance on outdated credit scoring models.

Between 2004 and 2021, the share of originations under $150,000 has declined by 70%, forcing a growing number of consumers to seek alternative forms of financing instead of getting a mortgage, a Pew Charitable Trusts report found.

The move cancels the fee Fannie Mae and Freddie Mac would have imposed on certain loans for which the borrower's total debt exceeded 40%.

The shift opens the door for regional banks to increase their aggregation activities, analysts said.

The Federal Housing Finance Agency said it would heed the recommendation from a report by its Office of the Inspector General released this week.

The final rule also orders the government-sponsored enterprises to give advance notice of new activities to determine if they are subject to these procedures.

The bill will require the agency to codify the use of desktop appraisals.

However, a tiered pricing system will limit an inflation-driven increase to under 10% for a small group of originators.

The gain of 3 percentage points in 2022 reinforced industry calls for the agency's mortgage insurance premium to be slashed when the current fiscal year federal budgeting process is completed.

Choices of which homes are used for comparisons play a major role in disparate home valuations for Black and white homeowners, according to studies recently released by the National Community Reinvestment Coalition and academic researchers.