Cheaper credit reports for borrowers above 700. Lower FHA insurance premiums. Fewer hurdles to refinancing. The Mortgage Bankers Association’s new affordability roadmap targets several costs that can determine whether an originator gets a loan closed.
Released Oct. 14, the plan calls for administrative and regulatory changes spanning borrower charges, agency pricing, and LO compensation. These are recommendations, not adopted changes.
For originators, the key proposals include:
- Credit reports: Allow single-file reports for borrowers with scores above 700, preserving the option for additional reports on higher-risk loans.
- GSE pricing: Reduce and align loan-level price adjustments on owner-occupied purchase loans.
- FHA insurance: Lower annual premiums alongside underwriting adjustments for loans with layered risks.
- Refinancing: Create a streamlined GSE option for borrowers with strong payment histories refinancing into lower payments.
- LO compensation: Provide more flexibility to match competing offers and improve the economics of offering certain affordable loan products.
The roadmap is an advocacy agenda, not an announcement of adopted policy changes. Its recommendations address both what borrowers pay and the expenses that influence which loans lenders find economical to originate.
A Credit-Report Threshold Above 700
MBA proposes single-file credit reports for borrowers with scores above 700, preserving additional reports as an option for higher-risk loans.
Tri-merge costs have tripled or quadrupled over five years, driving MBA’s push to end the three-bureau requirement for lower-risk borrowers. The group argues that single-file lending would increase competition among bureaus and lower closing costs.
The roadmap sets no criteria beyond the score threshold or guidance on when additional reports would be needed.
Lower FHA Premiums And Purchase-Loan Charges
MBA wants a modest reduction in FHA’s annual mortgage insurance premium, illustrating that a 20-basis-point cut would save nearly $800 a year on a $400,000 loan. It pairs that relief with underwriting adjustments for loans carrying layered risks, such as low credit scores, high DTI ratios, and no reserves.
For conventional purchases, MBA proposes reducing and aligning Fannie Mae’s and Freddie Mac’s LLPAs on owner-occupied loans. A quarter-point reduction would cut upfront costs by $1,000 on a $400,000 loan.
Both measures build on industry requests for lower borrowing costs earlier this year.
A Cheaper Path To Refinance
MBA proposes a streamlined GSE refinance for borrowers with strong payment histories who would obtain lower payments. Reducing underwriting costs and delays could make smaller payment savings worth pursuing, though the paper provides no detailed eligibility standards.
For VA IRRRLs, MBA supports removing the 36-month recoupment requirement for certain ARM-to-fixed and shorter-term refinances, while retaining protections against loan churning.
Compensation Reform Reaches Beyond Rate Matching
MBA wants lenders to be able to reduce an originator’s compensation to help match a competing offer. As NMP reported earlier this week, lenders can already improve pricing, but generally cannot fund that concession by selectively cutting the LO’s agreed compensation.
MBA’s argument extends beyond saving a rate-shopped loan: it says compensation restrictions discourage HFA, construction, down payment assistance, and assumption loans. Greater flexibility could make those products more economical to originate, potentially expanding an LO’s business while changing what individual transactions pay.
The roadmap does not specify how lenders and LOs would agree to or share the cost of pricing concessions.
