WASHINGTON (NEXSTAR) — If you’re buying a home this year, you could see lower mortgage fees.
That’s because the federal government recently tweaked how it prices federally-backed mortgages. Republicans on Capitol Hill call the change unfair, because it raises prices for other borrowers.
Sen. Eric Schmitt, R-Miss., slammed the new federal rule. He said it will lower mortgage fees for Americans with bad credit scores at the expense of Americans with good credit.
“This new mortgage rule is straight-up socialism,” said Schmitt. “Now they’re going to have to pay thousands of dollars more.”
In a letter to the Federal Housing Finance Agency, Schmitt and more than a dozen Senate Republicans called the pricing adjustment on new Fannie Mae and Freddie Mac-backed mortgages ‘shortsighted’ and ‘counterproductive.’
But the agency calls those attacks inaccurate.
Michael Shemi, a principal advisor at FHFA, confirmed some lower-income borrowers will see cheaper mortgage fees, while those of other borrowers will go up. But he argued credit scores are not the reason.
“We’ve done it by targeting higher fees on products like second home loans, investment properties, cash out refinance loans, and those are actions we’ve taken over the last 18 months,” said Shemi.
He said the changes are modest and designed to help more people buy homes.
Schmitt is introducing a bill aimed at stopping federal agencies from implementing new rules without the consent of congress. He’s also demanding the FHFA answer a list of questions about the new mortgage rule by May 10.
The federal agency said they are working on their response.