Jul 14 2023

WASHINGTON, D.C. – Senator Thom Tillis recently co-introduced the Middle Class Borrower Protection Act to reverse a harmful Biden Administration provision that increases mortgage rates for many middle class Americans.

In May, the Biden Administration implemented changes to the Loan-Level Price Adjustment (LLPA) that punishes responsible home buyers with good credit to subsidize those with bad credit. This bill would restore the LLPA to its former state and ensure that the irresponsible decision-making that led to this change will not be repeated.

“We need to stop President Biden’s reckless proposal to social engineer the housing market by forcing homeowners to subsidize other Americans who are considered high-risk borrowers,” said Senator Tillis. “I’m proud to join my colleagues in the effort to overturn this egregiously unfair rule.”  

On May 1, 2023, the Federal Housing Finance Agency (FHFA) implemented misguided changes to the Loan Level Pricing Adjustments (LLPA), which are one-time, upfront fees charged to lenders when Fannie Mae and Freddie Mac (GSE’s) purchase their loans. These fees get passed to the borrowers in the form of higher interest rates. The change to the LLPA effectively raises rates for those with credit scores above 680 to subsidize relatively lower rates for those with credit scores below that threshold.