Advocates raise key housing issues, seeking action
The Community Home Lenders of America (CHLA) has called on newly confirmed Federal Housing Finance Agency (FHFA) director Bill Pulte to prioritize the needs of small independent mortgage banks (IMBs) and reinforce Fannie Mae and Freddie Mac’s commitment to affordable housing. In a letter sent to Pulte, CHLA outlined key recommendations to ensure equitable access to mortgage services and to support smaller lenders operating within the housing finance market.
CHLA’s letter emphasized four main priorities for Fannie Mae and Freddie Mac:
- Preserving affordable housing accessibility – CHLA urged the government-sponsored enterprises (GSEs) to maintain their role in financing affordable housing, including condominium, investor, and second-home loans, without imposing volume caps or fee increases unrelated to risk.
- Adhering to cash window requirements – The letter called on Fannie and Freddie to strictly follow the Preferred Stock Purchase Agreement (PSPA) cash window requirements and avoid reducing the number of seller-servicers solely for cost-cutting purposes.
- Reforming loan repurchase practices – CHLA advocated for replacing repurchase demands on performing loans with loan defects with an indemnification fee, aligning with Enterprise risk standards.
- Reducing mortgage origination costs – The association urged action to lower origination costs, including rejecting a bi-merge credit reporting model in favor of a tri-merge system and addressing rising costs associated with FICO’s credit scoring services.
The letter also commended past efforts during the Trump administration to establish permanent cash window requirements, which CHLA believes have fostered fairness for small lenders. Furthermore, the organization expressed interest in participating in future discussions about a potential Fannie and Freddie exit from federal conservatorship.
CHLA reaffirmed its commitment to advocating for policies that ensure small and mid-sized community mortgage lenders continue to have fair access to federal mortgage programs. The organization stressed that such policies are critical to maintaining competition in the mortgage market and broadening access to homeownership opportunities for borrowers across the country.
How should FHFA support small lenders? Share your thoughts in the comments below.
