[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3564 Referred in Senate (RFS)]
<DOC>
118th CONGRESS
1st Session
H. R. 3564
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 10, 2023
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
AN ACT
To cancel recent changes made by the Federal Housing Finance Agency to
the up-front loan level pricing adjustments charged by Fannie Mae and
Freddie Mac for guarantee of single-family mortgages, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Middle Class Borrower Protection Act
of 2023''.
SEC. 2. REPEAL OF RECALIBRATED SINGLE-FAMILY PRICING FRAMEWORK.
Not later than the expiration of the 60-day period beginning on
the date of the enactment of this Act, the Director of the Federal
Housing Finance Agency shall revise the recalibrated single-family
pricing framework charged by the enterprises for guarantee of mortgages
on single-family housing so that such fees are identical to the fees of
the standard single-family pricing framework in effect immediately
before May 1, 2023.
SEC. 3. RESTRICTIONS ON FHFA ADJUSTMENTS TO SINGLE-FAMILY PRICING
FRAMEWORK.
(a) Temporary Prohibition on Further Adjustments to Single-family
Pricing Framework.--During the period beginning upon the date of the
revision of the recalibrated single-family pricing framework pursuant
to section 2 and ending 90 days after the submission to the Congress of
the report required under section 5, the Director may not further
revise the single-family pricing framework from such framework in
effect pursuant to the revision required by section 2.
(b) Administrative Procedures for Adoption of Adjustments to the
Single-family Pricing Framework.--After expiration of the period
referred to in subsection (a), when proposing adjustments to the
single-family pricing framework, the Director shall follow procedures
that are as close as practicable to those requirements for a Federal
agency issuing a rule under chapter 5 of title 5, United States Code
(commonly referred to as the ``Administrative Procedure Act'').
(c) FHFA Requirement for the Use of Risk-based Pricing.--Section
1367(b)(2) of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4617(b)(2)) is amended by adding at
the end the following new subparagraph:
``(L) Additional powers as conservator.--The Agency
shall, as conservator for an enterprise, to the
greatest extent feasible require that any
modifications, including increases, decreases, or
eliminations, approved to a loan-level pricing
adjustment fee, as such term is defined in section 6 of
the Middle Class Borrower Protection Act of 2023,
charged by an enterprise shall be based on the risk
posed by the mortgage loan to the enterprise.''.
SEC. 4. PROHIBITION OF LOAN-LEVEL PRICE ADJUSTMENTS BASED ON DEBT-TO-
INCOME RATIO.
The Director and the enterprises shall not impose any loan-level
pricing adjustment fee that is based on the ratio of the debt of the
mortgagor to the income of the mortgagor.
SEC. 5. GAO STUDY.
(a) Study.--The Comptroller General of the United States shall
conduct a study of the revisions made by the Federal Housing Finance
Agency to the standard single-family pricing framework under the
recalibrated single-family pricing framework to--
(1) analyze--
(A) the methodology, policy considerations, and any
other objectives used by the Federal Housing Finance
Agency as the basis for such revisions, including the
authority cited by the Director under the Federal
Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4501 et seq.) to require such
revisions;
(B) the data, econometric modeling, and other
inputs supplied by the enterprises during the revisions
process;
(C) the extent to which such revisions comply with
the objectives of the Enterprise Regulatory Capital
Framework, including the interaction with and treatment
of any private mortgage insurance required in
connection with a residential mortgage transaction; and
(D) the economic impact of such revisions on
various classes of lenders and borrowers affected by
such revisions;
(2) determine the extent to which such revisions--
(A) were conducted on the basis of, and how they
might deviate from, the principle of risk-based
pricing;
(B) deviate from the data, econometric modeling,
and other inputs supplied by the enterprises during the
revisions process;
(C) achieve the objectives of the Enterprise
Regulatory Capital Framework, including if such
revisions have resulted in either a negative
profitability gap or negative rate of return on the
targeted rate of return on capital for any business
segment under the recalibrated single-family pricing
framework;
(D) represent any increased risks to the safety and
soundness of the enterprises; and
(3) assess the benefits that would accrue to first-time,
low-income homebuyers based on the recalibrated single-family
pricing framework taking effect.
(4) assess the impacts that the recalibrated single-family
pricing framework taking effect would have on affordable
housing preservation, rural housing, and manufactured housing.
(b) Report.--The Comptroller General shall submit a report to the
Congress setting forth the findings and conclusions of the study, and
make the report publicly available online on a website of the
Department, not later than the expiration of the 14-month period
beginning on the date of the enactment of this Act.
SEC. 6. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Director of
the Federal Housing Finance Agency.
(2) Enterprise.--The term ``enterprise'' has the meaning
given such term in section 1303 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4502).
(3) Loan-level pricing adjustment fee.--The term ``loan-
level pricing adjustment fee'' means an up-front fee paid by
lenders when a mortgage loan is acquired by an enterprise.
(4) Recalibrated single-family pricing framework.--The term
``recalibrated single-family pricing framework'' means the
loan-level pricing adjustment fee structure as referred to in
the announcement of the Federal Housing Finance Agency on
January 19, 2023, relating to ``Updates to the Enterprises'
Single-Family Pricing Framework'', and set forth in Federal
National Mortgage Association Lender Letter LL-2023-01 and
Federal Home Loan Mortgage Corporation Bulletin 2023-1.
(5) Risk-based pricing.--The term ``risk-based pricing''
means the calibration of fees based on the expected credit
losses to an enterprise of each single-family mortgage category
as defined by an enterprise based on the credit score and loan-
to-value ratio characteristics of a mortgage.
(6) Standard single-family pricing framework.--The term
``standard single-family pricing framework'' means the loan-
level pricing adjustment fee structure in effect on April 30,
2023.
SEC. 7. ENTERPRISE GUARANTEE FEES.
Subsection (f) of section 1327 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4547(f)) is
amended by striking ``October 1, 2032'' and inserting ``October 1,
2033''.
Passed the House of Representatives June 23, 2023.
Attest:
CHERYL L. JOHNSON,
Clerk.