[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2296 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 2296

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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 13, 2023

Mr. Braun (for himself, Mr. Marshall, Mr. Tillis, Mrs. Hyde-Smith, Mr. 
Moran, Mr. Cotton, Mr. Cornyn, Mr. Barrasso, Mr. Budd, Mr. Wicker, Mr. 
   Cramer, Mr. Thune, Mr. Rubio, Mr. Cruz, and Mr. Scott of Florida) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
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. 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 the 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. 3. REPEAL OF RECALIBRATED SINGLE-FAMILY PRICING FRAMEWORK.

     Not later than 60 days after the date of the enactment of this 
Act, the Director shall revise the recalibrated single-family pricing 
framework charged by the enterprises for the 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. 4. RESTRICTIONS ON FHFA ADJUSTMENTS TO SINGLE-FAMILY PRICING 
              FRAMEWORK.

    (a) Temporary Prohibition on Further Adjustments to Single-Family 
Pricing Framework.--During the period beginning on the date of the 
revision of the recalibrated single-family pricing framework pursuant 
to section 3 and ending on the date that is 90 days after the date on 
which the Comptroller General of the United States submits to Congress 
the report required under section 6, the Director may not further 
revise the single-family pricing framework from the framework in effect 
pursuant to the revision required by section 3.
    (b) Administrative Procedures for Adoption of Adjustments to the 
Single-Family Pricing Framework.--After the expiration of the period 
described 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:
                    ``(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 is defined in section 2 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. 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. 6. 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 those 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 those 
                revisions;
                    (B) the data, econometric modeling, and other 
                inputs supplied by the enterprises during the revision 
                process;
                    (C) the extent to which the 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 the revisions on various 
                classes of lenders and borrowers affected by the 
                revisions;
            (2) determine the extent to which the 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 
                revision process;
                    (C) achieve the objectives of the Enterprise 
                Regulatory Capital Framework, including if the 
                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; and
                    (D) represent any increased risks to the safety and 
                soundness of the enterprises;
            (3) assess the benefits that would accrue to first-time, 
        low-income homebuyers based on the recalibrated single-family 
        pricing framework taking effect; and
            (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.--Not later than 14 months after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
to Congress and make publicly available on a website of the Government 
Accountability Office a report setting forth the findings and 
conclusions of the study conducted under subsection (a).
                                 <all>