Responsible Borrower Protection Act of 2025
- Sponsor
- Rep. Biggs, Andy [R-AZ-5]
- Committees
- Financial Services Committee (primary)
- Last action
- Jan 3, 2025
Bottom line
This bill aims to reverse recent changes to mortgage fees imposed by Fannie Mae and Freddie Mac, thereby maintaining the previous fee structure for single-family housing mortgages.
What it actually does
This bill prohibits the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, from implementing specific changes to their single-family housing mortgage credit fee pricing framework that were announced on January 19, 2023. It explicitly nullifies the FHFA's announcement and related guidance documents, effectively reverting to the prior mortgage fee structure.
Proponents argue
Proponents argue that the FHFA's proposed fee changes disproportionately penalize borrowers with higher credit scores and larger down payments, effectively subsidizing riskier loans. They contend that these changes undermine risk-based pricing principles, making homeownership less affordable for responsible borrowers and potentially destabilizing the housing market.
Opponents contend
Opponents, likely including the FHFA, would argue that the fee changes were designed to promote equitable access to homeownership, particularly for underserved communities, and to ensure the long-term stability of the housing finance system by better aligning fees with risk across all borrower segments. They might contend that the previous system placed an undue burden on certain low-to-moderate income borrowers.
The bill text is extremely short and can be read in minutes, allowing ample time for evaluation.
Section 2
Prohibition on FHFA Mortgage Credit Fee Changes
This section explicitly prohibits the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises (Fannie Mae and Freddie Mac) from implementing the single-family housing mortgage credit fee pricing framework changes announced on January 19, 2023. It specifically nullifies the FHFA announcement and related Lender Letter LL-2023-01 from Fannie Mae and Bulletin 2023-1 from Freddie Mac, ensuring they have no legal effect.
Supporters argue
Supporters argue this provision protects responsible borrowers from being penalized by fee adjustments that would have increased costs for those with good credit and substantial down payments, thereby maintaining fairness and sound risk-based pricing in mortgage markets.
Critics contend
Opponents would contend that canceling these changes prevents the FHFA from implementing policies aimed at increasing equitable access to homeownership and potentially strengthening the housing finance system by spreading risk more broadly. They might argue it undermines the FHFA's regulatory independence.
Tradeoffs
The provision balances the desire to maintain lower costs for borrowers with strong credit against the goal of expanding access to credit for a broader range of borrowers, potentially at the expense of traditional risk-based pricing.
Section 3
Affirmation of Risk-Based Pricing Principles
This section clarifies that the Act does not intend to prohibit Fannie Mae and Freddie Mac from generally applying risk-based pricing for credit fees on single-family housing mortgages. It aims to ensure that while the specific 2023 fee changes are canceled, the underlying principle of adjusting fees based on borrower risk remains permissible for future policy decisions.