January 7, 2022

REDWOOD SUPPORTS FHFA’S ANNOUNCEMENT REGARDING CHANGES TO ENTERPRISE PRICING FRAMEWORK

We applaud the FHFA’s announcement earlier this week to revise the GSE Enterprise Pricing Framework by increasing upfront fees for certain high balance loans and loans on second homes. We believe the changes are in keeping with the GSEs’ mission of supporting equitable access to housing and will benefit borrowers most in need of the valuable liquidity that the GSE loan programs provide.

As we laid out in our recent white paper on the topic, we believe the GSEs can more effectively support their affordable housing mission with a reduced focus on high balance loans, as these activities divert capital and resources from those that directly support their mission-driven outcomes. The mortgage market’s private sector has grown significantly in recent years, has consistently offered competitive rates to homeowners, and remains best equipped to manage the upfront and ongoing disciplines inherent in lending to these types of borrowers. In this regard, Redwood directly supports the safety and soundness principles emphasized by the FHFA to help ensure a strong and stable housing finance market.

As the leading voice for quality and innovation in the private sector, Redwood’s mission is to help make quality housing accessible to all American households. We believe this announcement from the FHFA is in keeping with that mission. We will continue to provide attractive and customized solutions to borrowers through the array of loan programs that we offer our origination partners.

Chris Abate, Redwood’s Chief Executive Officer, commented: “The FHFA’s announcement provides welcome additional alignment between private capital and the GSEs in furthering our collective goals for housing access and affordability. Redwood remains a highly complementary partner to the GSEs and we view these changes to be constructive for non-agency origination volumes overall.”

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