NFHA Lauds FHFA’s Decision to Remove the Debt-to-Income Fee from Loan Pricing

FOR IMMEDIATE RELEASE
May 10, 2023
Media Contact: Izzy Woodruff | Iwoodruff@nationalfairhousing.org

NFHA Lauds FHFA’s Decision to Remove the Debt-to-Income Fee from Loan Pricing

Washington, D.C. — Today, the National Fair Housing Alliance (NFHA) released the following statement from Executive Vice President, Nikitra Bailey, in response to the Federal Housing Finance Agency’s (FHFA) decision to rescind its Debt-to-Income (DTI) fee.

“NFHA applauds Director Thompson’s leadership of the Federal Housing Finance Agency in opening up access to homeownership for first-time homebuyers and expanding opportunities for underserved borrowers that the future system’s success depends on. The removal of the DTI fee better aligns the FHFA’s policies with those of the Consumer Financial Protection Bureau (CFPB). The CFPB eliminated its DTI requirement in the Qualified Mortgage Rule because DTI is not a reliable predictor of risk. Many organizations have conducted research that demonstrates the DTI is less predictive of a consumer’s risk and is highly correlated to race. As such, any requirement or pricing based on DTI has a likelihood of generating disproportionately biased outcomes for Black, Latino, AAPI, and Native borrowers.

“While we support the removal of the DTI fee, we believe it is still necessary to fully eliminate the Loan Level Price Adjustments (LLPAs) put in place following the Great Recession. LLPAs are excessive pricing fees that serve as barriers to homeownership for first-time homebuyers and communities underserved by the Government Sponsored Enterprises (GSEs). They place the burden of possible future catastrophic risk on the underserved communities most harmed by abusive predatory lending that was the result of lax regulation and lenders’ interest in achieving excessive profits. We look forward to working with FHFA on future efforts to further expand equitable access to homeownership.”

###

The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 170 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities. Visit nationalfairhousing.org to learn more.