Washington, D.C. – Today at a House Financial Services Committee markup session, Majority Whip Tom Emmer (MN-06) condemned the Biden administration’s recently-implemented unilateral change to mortgage prices that forces high-credit homebuyers to pay more every month to subsidize the loans of risky borrowers.

In January 2023, the Federal Housing Finance Agency (FHFA) announced a set of mandated changes to the Loan Level Pricing Adjustments (LLPAs), which are one-time, upfront fees charged to lenders when Fannie Mae and Freddie Mac, both government-sponsored enterprises, purchase their loans. LLPAs get passed on from lenders to the borrowers in the form of higher interest rates. The January changes, which went into effect May 1, both increased fees for half of all borrowers with credit scores over 680 while decreasing fees for 90% of those under 680, regardless of how much of a down payment they made or if they qualify as low income. Two-thirds of all Americans have a credit score of 680 or higher.

Earlier this month, a poll of over 6,000 Sixth District constituents revealed that 93 percent disagreed with the Biden administration’s credit score redistribution plan.

Emmer serves as an original cosponsor of Representative Warren Davidson’s (OH-08) Middle Class Borrower Protection Act. The bill repeals the recent FHFA changes to mortgage pricing, it institutes a freeze on any mortgage pricing changes pending a review by the Government Accountability Office, and makes future mortgage pricing changes accountable to the American people by requiring a public notice and comment period.

Emmer’s remarks are available to watch here. A transcript is available below:

Congressman Emmer: Thank you, Mr. Chair. Last week, my office actually surveyed our constituents from the Sixth Congressional District of Minnesota regarding the Biden Administration's socialist and unilateral mortgage pricing change that went into effect this month. Of the 6,000 results - and this is rural America - of the 6,000 results, 93% disagree with this Administration's credit score redistribution plan. Fundamentally, it is wrong to support those with a history of financial irresponsibility by punishing Americans who have worked diligently to earn a high credit score.

And the numbers don't lie. The Federal Housing Finance Agency’s changes both increased fees for half of all borrowers with FICO scores over 680 while decreasing fees for 90% of those with scores under 680, regardless of how much of a down payment they made or if they qualify as low income. The FHFA tells us that it had to make these changes based on its capital rule. My constituents in Minnesota know that any capital rule that tells people the safer thing to do is to borrow beyond their means is a bad one that fundamentally needs to be rethought.

So, whichever way this Administration wants to present this flawed policy to the American people, this ploy to politicize home ownership, to the detriment of those who set themselves up for success, poses a safety and soundness concern to the housing market and it puts taxpayers at risk.

Homeownership in this country is becoming a pipe dream, frankly, especially for younger generations. Young Americans are faced with the results of irresponsible government decisions, massive spending massive inflation and steep rate hikes. My constituents rightly are angry about this mortgage pricing change. It's a gross display of yet another unilateral bureaucrat decision here in Washington, D.C. with far-reaching impacts on access to homeownership just to prop up a socialist political agenda. I would hope the sharp public criticism of this assault on the safety and soundness of our housing market and on access to homeownership is evidence enough that socialism will never prevail and bureaucratic abuses like this are met with strong resistance and demands for accountability.

I am proud to be an original cosponsor of Mr. Davidson's legislation, the Middle Class Borrower Protection Act. This bill repeals the recent FHFA change to mortgage pricing, it institutes a freeze on any mortgage pricing changes pending a review by the Government Accountability Office, and it makes future mortgage pricing changes subject to the standard public notice and comment period. This will hold the FHFA accountable to the American people – and by the way, the FHFA is supposed to be working for the American people, not the other way around – and prevent it from ever attempting to enact a credit score redistribution plan again to politicize homeownership. I encourage my colleagues on this committee to support its passage in this markup. And I yield to my colleague, Mr. Davidson from Ohio.

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