How the US is Subsidizing High-Risk Home Buyers — at The Cost of Those With Good Credit

#126
#126
BowlBrother85 said:
No $hit. Where did I say otherwise?

You will get preferential treatment for having a high FICO score, especially with a pre-existing relationship with your lender. It's a reward. The lender will covet your business, and be more than happy to either waive fees or offset fees which can't be waived by numerous other means.

Does everything have to revolve around politics? Good lord.
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You're joking. Right? This is nothing but politics - socialist politics.
 
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#128
#128
 
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#129
#129
Trump is a Russian Agent!

Now that is comical overreaction..7 years of pure hysteria.
 
#130
#130
Orangeburst said:
Not what these media outlets think. It is a subsidy.

Biden raises costs for homebuyers with good credit to help risky borrowers
Mortgages for Homebuyers with Good Credit To Cost More Starting May 1 — High-Risk Buyers Will Pay Less
Mortgage fee structure change will arrive May 1: Here's what to know
Mortgages for Homebuyers with Good Credit To Cost More Starting May 1 — High-Risk Buyers Will Pay Less | GOBankingRates
How the US is subsidizing high-risk homebuyers -- at the cost of those with good credit
High credit score borrowers penalized under new federal mortgage fee plan
Real estate expert shreds Biden rule punishing homebuyers with good credit: 'It's madness'
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1) It involves a change to the Loan Level Price Adjustment, which is partially based on FICO scores, but debt-to-income ratios and loan-to-value ratios are also factors. They are frequently changed. This is nothing new.

2) It is a fee structure which serves to lower costs for at-risk borrowers, (I suppose you can call that a subsidy, if you want) but here is where the overreaction is coming from : There is no scenario in which someone with a lower FICO score will pay a lower fee as a result.

3) As I have stated before, fees can be easily offset in favor of coveted borrowers, by reducing other costs associated with borrowing. The mortgage lender still maintains broad discretion.

Also, some of the posts here have confused the change in the fee structure with the actual cost. Make no mistake that this is done to increase home ownership, the reaction to it here has been extreme. Changes to the LLPA are made all the time.
 
#131
#131
BowlBrother85 said:
1) It involves a change to the Loan Level Price Adjustment, which is partially based on FICO scores, but debt-to-income ratios and loan-to-value ratios are also factors. They are frequently changed. This is nothing new.

2) It is a fee structure which serves to lower costs for at-risk borrowers, (I suppose you can call that a subsidy, if you want) but here is where the overreaction is coming from : There is no scenario in which someone with a lower FICO score will pay a lower fee.

3) As I have stated before, fees can be easily offset in favor of coveted borrowers, by reducing other costs associated with borrowing. The mortgage lender still maintains broad discretion.

Also, some of the posts here have confused the change in the fee structure with the actual cost. Make no mistake that this is done to increase home ownership, the reaction to it here has been extreme. Changes to the LLPA are made all the time.
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No one here has said that. You are getting lost in the semantics. They are paying a lower fee than they should and only offset by others with better scores paying higher rates than they would otherwise.

And we are 130 posts with many made by you..so I wouldn't call it an over reaction.
 
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#132
#132
BowlBrother85 said:
1) It involves a change to the Loan Level Price Adjustment, which is partially based on FICO scores, but debt-to-income ratios and loan-to-value ratios are also factors. They are frequently changed. This is nothing new.

2) It is a fee structure which serves to lower costs for at-risk borrowers, (I suppose you can call that a subsidy, if you want) but here is where the overreaction is coming from : There is no scenario in which someone with a lower FICO score will pay a lower fee as a result.

3) As I have stated before, fees can be easily offset in favor of coveted borrowers, by reducing other costs associated with borrowing. The mortgage lender still maintains broad discretion.

Also, some of the posts here have confused the change in the fee structure with the actual cost. Make no mistake that this is done to increase home ownership, the reaction to it here has been extreme. Changes to the LLPA are made all the time.
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We completely understand the changes. Responsible people with high credit scores are being made to pay more so that they can subsidize less credit worthy homebuyers. It is a socialist policy.
 
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#133
#133
Orangeburst said:
No one here has said that. You are getting lost in the semantics. They are paying a lower fee than they should and only offset by others with better scores paying higher rates than they would otherwise.
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Yeah .... that's close.

However, it's not a new thing. It's just been tweaked recently. The government is always seeking to increase home ownership - but to what extent that happens will largely be up to the discretion of mortgage lenders.
 
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#134
#134
Vol423 said:
We completely understand the changes. Responsible people with high credit scores are being made to pay more so that they can subsidize less credit worthy homebuyers. It is a socialist policy.
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People pay extra fees for everything from gas to tolls to fees on airline tickets and its redistributed to give access to roads and travel for everyone, in unequal amounts. So we have such spending and fee generating in a lot of ways and everyone is ok with it.
 
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#135
#135
lawgator1 said:
People pay extra fees for everything from gas to tolls to fees on airline tickets and its redistributed to give access to roads and travel for everyone, in unequal amounts. So we have such spending and fee generating in a lot of ways and everyone is ok with it.
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Yes ... and I will emphasize that this is not some new practice. It's an adjustment to an existing policy. It is frequently tweaked.
 
#136
#136
TNVOLNAVY said:
View attachment 547689One graph explains it.
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slanted graph there. they are cutting off 2/3 of the total value below, and leaving off the top percentages to make the "problem" look worse than it is.

In reality the average credit score for blacks is 7% less than it is for Asians. 745-677=68/900=7%. this graph would have you think the difference is monumental, 6x the difference. which is patently false.
 
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#139
#139
BowlBrother85 said:
Yeah .... that's close.

However, it's not a new thing. It's just been tweaked recently. The government is always seeking to increase home ownership - but to what extent that happens will largely be up to the discretion of mortgage lenders.
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The gov wants universal free home for everyone, they'll choose what houses people are to get. You seem that you don't understand this.
 
#142
#142
The administration claims the change will help support low-income home buyers. But others say it's part of the White House’s ongoing effort to remedy racial differences in home ownership.

Whatever the rationale, the result is clear: Borrowers with strong credit will likely wind up paying thousands of dollars more over the course of their mortgages, thanks to the Biden administration’s policy.

When an individual takes out a mortgage, the interest rate they pay generally reflects two things: the federal funds rate set by the Federal Reserve and something called a loan-level price adjustment. The latter functions like a car insurance premium that goes up after you’ve had an accident.

In short, riskier borrowers with low credit scores or income pay more each month for their mortgage. These borrowers will still pay more after May 1 but much less than they paid before. In order to compensate for that lost revenue, borrowers with strong credit will see their monthly increase to roughly $40 a month on a $400,000 mortgage. That’s an extra $14,400 over the course of a standard 30-year mortgage.

According to former Federal Housing Finance Agency director Mark Calabria, shaping the policy to benefit anyone with lousy credit lets the Biden administration avoid offering sweetheart deals to minorities, which would violate federal law.

"The Biden administration is definitely trying to create more of a cross subsidy between good credit and bad credit, that’s the intent," Calabria said. "They are essentially trying to discriminate by race within the legal rules they have and minorities tend to have lower credit scores."

A review of the Federal Housing Finance Agency’s recent rule proposals make it clear that increasing minority—in particular black—home equity is at the heart of a variety of agency initiatives.

Homebuyers With Good Credit Could Pay To Boost Black Homeownership Under Biden Rule
 
#143
#143
EXCLUSIVE: Republicans write letter to Biden administration threatening to REPEAL new mortgage rule that would 'tax' homeowners with good credit to benefit Americans who don't pay bills on time

Republican Reps. Patrick McHenry and Warren Davidson sent a letter on Tuesday promising action if the Biden administration did not reverse changes that increase mortgage costs for homeowners with good credit to offset those who have riskier credit.

Financial Services Chair McHenry, R-N.C., and Housing and Insurance subcommittee chair Davidson, R-Ohio, said they would move to repeal the new provision through legislation if the Federal Housing Finance Agency did not move to do so itself.

'It's a socialist redistribution of wealth,' said Davidson in a statement. 'If the FHFA doesn't reverse this rule, Congress must.'

Republicans threaten to REPEAL new mortgage rule that would 'tax' borrowers with good credit | Daily Mail Online
 
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#144
#144
Here’s a great example of what I’m talking about. I found it by just doing a statewide search on realtor for multi family and then adding the keyword “mobile”

Lack of paved roads, they only have 7 mobile homes in the park and own most of them,they have another 7 empty lots, and are trying to sell the place for 400k. On top of all that they have septic tanks.

It’s crazy how over priced these things are. One of the problems is some people think owning the mobile homes adds value (increased rent + home value). The truth is most of these homes have next to no value and the rent difference vs lot rent value is so low that it makes 0 sense to add the additional liability, hassle, etc

https://www.realtor.com/realestatea...r-Hollow-Rd_Rogersville_TN_37857_M98841-59602
 
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#146
#146
Everything is expensive out there. Looking for a replacement for an involuntary conversion....
 
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