Mortgage Fees: The Unequal Impact on Borrowers with Good Credit

Senate Republicans are criticizing changes to federal mortgage fees that benefit borrowers with lower credit scores, claiming that the Biden administration is incentivizing bad behavior and hurting responsible borrowers. However, the criticism is based on a misunderstanding, as borrowers with lower credit scores still pay more for the same loan than those with higher credit scores. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, instituted the changes as part of a broader effort to improve the capitalization of the two entities and promote access to mortgage credit across the country. Industry groups have sought to correct the misleading right-wing narrative about the fees.