Comment Detail

Comment

Increasing LLPA’s a G-Fees is a bad idea because:

Affordability: Higher LLPAs will increase the cost of borrowing, making it more difficult for many potential homebuyers to afford homeownership. This will reduce overall demand in the housing market, leading to an increased slowdown in home sales.

Access to credit: Stricter LLPAs will result in tighter lending standards, making it harder for many borrowers to qualify for mortgages. This might disproportionately affect individuals with lower credit scores or those who don't meet the specific criteria, reducing their access to credit and hindering their ability to purchase a home. However, borrowers with Higher Credit Scores should also not be negatively impacted, by hitting them with LLPAs to cover risk costs for lower credit score borrowers. These LLPAs turn well qualified borrower off from buying as well.

Market dynamics: If LLPAs are implemented broadly across the housing market, they will have widespread effects. Higher costs and tighter lending standards will lead to decreased demand, slower home price growth, and instability in the housing market. This, in turn, will affect construction activity, home values, and overall economic conditions related to the housing sector.

The impact of increased LLPAs and G-Fees on the housing market can vary depending on the specific design and implementation of the policies. The current design should be re-evaluated with the current housing market in mind. This is not the time to increase these fees.

Thank you,