Disaster! Good Credit Rating Means You Pay for Risky Homebuyers

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A new federal Biden rule will force homebuyers with good credit scores to pay higher mortgage rates and fees so they can subsidize people with riskier credit ratings who want to buy a home.

It’s wealth redistribution and will be a disaster since risky homebuyers usually default. The feds will also temporarily ignore lenders’ debt-to-income ratio.  It determines if homebuyers can afford to pay their mortgages each month.
The fees are allegedly minimal for now, but you know how that goes.

The fee changes will go into effect May 1 as part of the Federal Housing Finance Agency’s push for affordable housing for risky buyers.

This will affect mortgages originating at private banks across the country. The federally backed home mortgage companies Fannie Mae and Freddie Mac will enact the loan-level price adjustments or LLPAs.

Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees, reports The Washington Times.

If you worked hard to build up good credit, you will pay more so you. can pay for people who built up bad credit.

“It’s going to be a challenge trying to explain to somebody that says, ‘I worked my whole life for high credit, and I’ve put a lot of money down, and you’re telling me that’s a negative now?’ That’s a hard conversation to have,” one worried Arizona-based mortgage loan originator told The Post.

“It’s unprecedented,” added David Stevens, who served as Federal Housing Administration commissioner during the Obama administration. “My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move.”

“This was a blatant and significant cut of fees for their highest-risk borrowers and a clear increase in much better credit quality buyers – which just clarified to the world that this move was a pretty significant cross-subsidy pricing change,” said Stevens, who is also the former CEO of the Mortgage Bankers Association.

Stevens says they’re trying to narrow the gap for minority home buyers [through socialism], but when interest rates go back down, home prices will go up, there will be more homebuyers, and the gap will persist. This does not solve the problem.

However, it certainly is unfair.

 


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lalasayswhat
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lalasayswhat
10 months ago

There is no amount of screwing you can do to Americans that will get them off there asses and protest. Unreal.

Dusty Dog
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Dusty Dog
10 months ago

They are called “high risk borrowers” for a reason. Obviously, the administration doesn’t remember, or choose to remember, the housing crisis that gave loans to buyers that couldn’t afford the payments, especially those adjusted rate mortgages.

IBoat
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IBoat
10 months ago

It just keeps getting worse with each passing day with this FOOL!

Blank
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Blank
10 months ago

“My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move.”

That’s odd. It really is. Just where have these CEOs been all these years? Had they not yet been born in 2007, when the subprime meltdown finally collapsed upon the many corrupt financial institutions which had been aggressively marketing “adjustable rate” mortgage loans to customers with ultra-lousy credit? Or are they all just too stupid to have learned anything in the 15 years since then? … that the corruptocrats in the government are deep in bed with the major financial institutions, the deliberate purpose of BOTH of which is to crash and recrash the economy until all that is left is … them … and their owning everything … while we “will own nothing … and like it.”

Peter York
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Peter York
10 months ago

I’m not a big player, but I own my condo in southern California outright and would like to move.

I do not have to. I’m retarrd (sic…pun intended).

many decisions, including should I buy or rent. well goodness, if this little item isn’t an example of government involvement in the economy depressing economic activity, what is?

why buy, says I.

didn’t they learn anything from their ‘liar loan’ debacle? zero-down ‘buyers’ taking hammers to the interior before walking away?