Two weeks ago, Pulte announced that Habib had been tasked with reviewing the LLPA structure: “Barry Habib is great and is working hard to present me options to fix LLPAs (a/k/a PRICING!!!!) and bring some relief to HOME OWNERS AND HOME BUYERS in President Trump’s America! The days of Biden need to be gone!,” Pulte said in a post on X.
Habib described the plan he sent to Pulte as suggestions informed by a “tremendous amount of research,” including conversations with top lenders that sell to Fannie Mae to pinpoint “where their pain points are.”
He said two areas stood out across the industry — the pricing hits on non-owner-occupied second homes and the costs associated with cash-out refinances. “They seem to be most concerned in these two areas,” Habib said.
While a timeline for any changes remains unclear, Habib said that “Pulte has a real desire to help and do good things.”
LLPAs can be paid upfront or built into the interest rate. But with mortgage rates already elevated, there’s often no room to add it there, so the cost has to be borne by the borrower out of pocket. And that can derail transactions.
The Biden administration proposed to revamp the LLPA matrix in 2023, but the revisions increased fees for some borrowers and introduced a controversial new LLPA tied to a debt-to-income ratio above 40%.
Following pushback from state governments and industry trade groups — which argued the changes penalized responsible borrowers — the DTI portion was ultimately rolled back.