H.R. 3564 — what changed
Middle Class Borrower Protection Act of 2023
From Introduced in House to Reported in House. 3 sections amended between Introduced in House and Reported in House.
Sec. 3 Restrictions on FHFA adjustments to single-family pricing framework
changed
Temporary prohibition on further adjustments to single-Family 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.
changed
Administrative procedures for adoption of adjustments to the single-Family 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”).
changed
FHFA requirement for the use of risk-Based 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. 5 GAO study
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—
analyze—
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;
the data, econometric modeling, and other inputs supplied by the enterprises during the revisions process;
changed
the extent to which such revisions comply with the objectives of the Enterprise Regulatory Capital Framework; Framework, including the interaction with and treatment of any private mortgage insurance required in connection with a residential mortgage transaction; and
the economic impact of such revisions on various classes of lenders and borrowers affected by such revisions; and
determine the extent to which such revisions—
were conducted on the basis of, and how they might deviate from, the principle of risk-based pricing;
deviate from the data, econometric modeling, and other inputs supplied by the enterprises during the revisions process;
changed
achieve the objectives of the Enterprise Regulatory Capital Framework, including if such revisions have resulted in either a negativity 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; and
represent any increased risks to the safety and soundness of the enterprises.
Report— The Comptroller General shall submit a report to the Congress setting forth the findings and conclusions of the study 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:
Director— The term “Director” means the Director of the Federal Housing Finance Agency.
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).
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.
changed
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 LL-2023-01 and Federal Home Loan Mortgage Corporation Bulletin 2023–1.2023-1.
added
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.
renumbered
was (7)
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.