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Comment

There are several reasons i think the current LLPA's structure should be changed.
1. I am a loan officer. It has become very difficult to quote rates because there are so many factors. Borrowers are encouraged to shop around for rates but it is difficult to give an accurate quote without them making a full application since their down payment, property type, credit score and income level are all factors. Borrowers are being forced to make applications with multiple lenders just to get a quote.

2. The current structure including the High Balance fee have become very cost prohibitive. High Balance loans typically perform very well so they are low risk. However they are being charged a premium that has a significant impact on the rate. Also, if they are not first time buyers or above the AMI the rate can be significantly different. In the DC metro area, if you make $168,601 your rate can be a full 1% higher than if you make $168,600. This arbitrarily punishes higher income earners.

3. I understand that your mission is to promote home ownership for first time buyers and lower income earners. The biggest problem in the current market is inventory. I think the current environment is is being exacerbated by the LLPA structure. Current owners have decided to sit on their low rate and either not move or hold their current residence as an investment property because the rate is so low. This lack of inventory is making it harder for new buyers to get in the market. Inexperienced first time buyers are being forced to bid above the asking price and give up their financing and appraisal contingencies because there is such fierce competition for every home. Reducing the LLPA's on all loans including high balance would make it more appealing for a current owner to sell which should increase inventory for first time buyers.