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Mortgage Bankers Association President and CEO Bob Broeksmit decried the glut of “misinformation” surrounding the changes in the Loan Level Price Adjustments (LLPAs) upfront fees for loans backed by Fannie Mae and Freddie Mac. The changes, which go into effect on May 1, has generated a flurry of news reports fixated on why people with higher credit scores might pay more while those with lower credit scores could pay less.

In an interview on Yahoo Finance, Broeksmit expressed his appreciation for being able to address the issue.

“Thanks for asking because there’s been an awful lot of misinformation out there on this, and I’d like to try to clear some of it up,” he said.

Broeksmit pointed out that the price changes are not an overnight occurrence – they were announced in late January and would not have an immediate impact on the mortgage market.

“If one of my member lenders is going to deliver a loan to Fannie Mae or Freddie Mac, that mortgage banker priced the loan to the consumer probably six weeks ago,” he said. “So, these fees are already in the market. So, there’s no magic May 1 date that any consumer needs to worry about.”

He also sought to dispel the notion of certain borrowers paying more than others.

“The second thing is that it is still the case that with the same down payment, borrowers pay less if they have a higher credit score,” he continued. “There’s been some confusion about the changes and some notion that it’s actually better to have a lower credit score or to put less money down in terms of loan pricing. And that’s simply not the case.”

Broeksmit added that next week’s changes “were meant to address some anomalies in the previous pricing structure, and now you’ll see a very smooth increase in price as the credit score worsens. So it makes pretty good sense now.”

Broeksmit stressed the main problem facing the housing market today is not the LLPA changes, but the lack of inventory for buyers.

“What we’re hearing at the Mortgage Bankers Association from member after member is that they have a very full pipeline of qualified borrowers who have their loans approved, subject only to finding a house, and that the inventory of houses for sale is at a stubborn low point,” he said. “So I think the latest numbers from the realtors were 2.6 months. So I don’t attribute the decline in pending home sales to a lack of demand as much as I do a lack of inventory. We’re hearing this in many different parts of the country, where if a house does come on the market, while it’s not the overheated 12 or 15 offers way above asking price that it might have been a year ago, it still moves very quickly, with more than one offer. So we’re really hoping that this as this spring advances that more homeowners will put their homes on the market. And we think that will juice the market nicely.”