Association puts forward proposals after FHFA's Pulte calls for fresh ideas
An overhaul at Fannie Mae and Freddie Mac is gathering pace, with Federal Housing Finance Agency (FHFA) director Bill Pulte issuing a call on X for input on “ideas on what to do differently” at the government-sponsored enterprises (GSEs) – and the National Association of Mortgage Brokers (NAMB) already has a few suggestions.
The association’s president Jim Nabors penned a letter to Pulte Tuesday reiterating its calls for reform in the name of boosting access to affordable homeownership and supporting “small business” mortgage professionals across the country.
Chief among those proposals: removing loan-level price adjustments (LLPAs) on investment properties and second homes, a requirement Nabors said put up “unnecessary barriers to entry” for qualified borrowers hoping to invest.
In 2023, the FHFA announced adjustments that reduced LLPAs for borrowers with lower credit scores and smaller downpayments.
But Valerie Saunders (pictured top), NAMB’s chief executive strategist, told Mortgage Professional America removing those restrictions had been a lynchpin of the association’s reform agenda this year and last.
“We’ve long had the view that the loan level pricing adjustments that went in place in 2023 and 2024 were not positive for consumers or for the industry in trying to get loans for consumers,” she said. “Any time you add additional layers of pricing on top of an already inflated interest rate it’s not going to be helpful for consumers who are looking to purchase a second home or have an investment property.
“There were additional LLPAs put in place all with the ultimate goal of providing more affordable housing and financing options, but I think those goals can be achieved without placing those pricing adjustments on top of other types of transactions.”
Association renews call for AMI eligibility cap reform
NAMB also called for the Area Median Income (AMI) eligibility cap to be reinstated to 100% for HomeReady and Home Possible loans, having recently been slashed to 80% – a level Nabors said has the unintended consequence of freezing out plenty of moderate-income households who earn more than the limit but still face housing affordability challenges.
Miki Adams of CBC Mortgage Agency highlights rising downpayment costs as a major hurdle for homebuyers, particularly first-timers, and stresses the importance of federal and private programs in overcoming affordability challenges.https://t.co/z3UIhaeTTI
— Mortgage Professional America Magazine (@MPAMagazineUS) April 21, 2025
That 20% swing, Saunders said, “does eliminate a large group of people. If we’re trying to provide access to credit, trying to have more low-to-moderate income borrowers be able to own a home, it just makes sense – especially with a rising cost of rent.
“To afford people the opportunity to have generational wealth, we have to be able to offer as many people as p[possible the chance to won a home and to utilize the programs that are available.”
Efforts to curb trigger leads take another step forward
Meanwhile, another of NAMB’s key pursuits in the regulatory arena received a welcome boost earlier this month. Hopes of curbing the use of so-called “trigger leads” in the mortgage market were narrowly dashed last year when legislation failed to clear the House of Representatives in December – but a fresh bill tabled this month may well stand a better chance of getting over the line this time around.
House lead cosponsors John Rose (R-Tenn.) and Ritchie Torres (D-NY) and Senate lead cosponsors Bill Hagerty (R-Tenn.) and Jack Reed (D-RI) have pushed ahead proposals to amend the Fair Credit Reporting Act and crack down on the sale of trigger leads, consumer information generated during a mortgage application when a credit report is pulled.
The changes, which were thwarted at the end of 2024 despite passage through the Senate, would prohibit credit reporting agencies from marketing and selling trigger leads unless the consumer provides explicit permission.
And Saunders – along with NAMB, a key mortgage industry advocate for trigger lead reform – said initial signs are good for the legislation’s progress this year.
“This is now the fourth congressional session that we’ve been working on having trigger lead legislation introduced and based off the feedback that we received in Washington DC as part of our legislative conference, it seems that this is definitely a priority for House Financial Services and obviously for the bill sponsors,” she said. “So it does seem like it has a much greater chance of getting through committee and potentially coming up for a vote in the House.”
Clamor for trigger lead reform has only strengthened among the mortgage community in the past year, particularly after credit bureaus staged a frantic last-gasp bid in 2024 to stymy the original legislative proposals – and as those bureaus gear up for a further scrap ahead.
Passage of the bill as it stands would be a positive step for mortgage shoppers and industry members alike, according to Saunders. “We’re happy with where it is at the moment,” she said. “The number-one priority is for consumers to have control of their financial information and for them to be able to ultimately, definitively say, ‘Yes, I agree to have my information sold.’ That’s the most important thing.”
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