The Federal Housing Finance Agency (FHFA) should be more transparent in its pricing of guarantee fees, CUNA wrote to the House Financial Services Subcommittee on Housing and Insurance. The comments were submitted for the record of the subcommittee’s Wednesday hearing on housing affordability.

“CUNA commends the FHFA’s recent decision to rescind its proposed loan level pricing adjustment (LLPA) upfront guarantee fees based on borrowers' higher debt-to-income (DTI) ratios for loans acquired by the GSEs,” the letter reads. “The DTI-based LLPA posed many significant operational concerns for credit unions.”

CUNA added that the proposal—and the concerns surrounding it—illustrate the need for more transparency and engagement with FHFA’s process for pricing credit risk in a manner that promotes liquidity and stability within the secondary mortgage market.

CUNA also applauded FHFA’s recently released request for input regarding its Single-Family Mortgage Pricing Framework.

“CUNA looks forward to working with FHFA, the GSEs and other industry stakeholders to continue to provide feedback on the process for setting guarantee fees,” the letter reads. “We hope this is the beginning of a regular process of engagement by the FHFA around guarantee fee pricing, particularly when significant operational considerations are implicated by changes.”

The letter also reiterates CUNA’s longstanding support for equal secondary mortgage market access to lenders of all sizes on an equitable basis as a core requirement of the housing finance system.