Hike in payments for good-credit homebuyers to subsidize high-risk mortgages

[Anonymous]

https://www.washingtontimes.com/news/2023/apr/18/joe-biden-hike-payments-good-credit-homebuyers-sub/

Homebuyers with good credit scores will soon encounter a costly surprise: a new federal rule forcing them to pay higher mortgage rates and fees to subsidize people with riskier credit ratings who are also in the market to buy houses.

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

The new fees will apply only to Americans buying houses or refinancing after May 1.

Is this true?

[Anonymous]

If true, this is outrageous!

[Anonymous]

This is what we voted for, so it doesn’t really surprise me.

[Anonymous]

Don't ask us. You can read all the releases on the FHFA and Fannie/Freddie sites.

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Updates-to-Enterprises-SF-Pricing-Framework.aspx

https://www.fhfa.gov/DataTools/Downloads/Pages/Enterprise-Housing-Goals-Data.aspx

[Anonymous]

I think this article does a better job: https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/

and you can see the fee table here:

[Anonymous]

What garbage.

[Anonymous]

Anonymous wrote:I think this article does a better job: https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/

and you can see the fee table here:

That is a better article.

I love this point:

“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.

What's the incentive for having good credit if it's going to cost more?

[Anonymous]

But I'm sure you don't like when people are homeless either, right? It ruins the aesthetic.

Rents are even higher than mortgages now and home ownership is hitting the record low. I'm glad this is happening.

[Anonymous]

So I guess we need to put 25%+ down.

[Anonymous]

Excuse me while I go tank my credit

[Anonymous]

Anonymous wrote:I think this article does a better job: https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/

and you can see the fee table here:

Am I reading this correctly, i.e. that as you go from 80-85% LTV to 85-90%, 90-85% and >95% you pay less risk premium (percentage wise)?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think this article does a better job: https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/

and you can see the fee table here:

Am I reading this correctly, i.e. that as you go from 80-85% LTV to 85-90%, 90-85% and >95% you pay less risk premium (percentage wise)?

Correction, meant "90-95%"

[Anonymous]

Anonymous wrote:But I'm sure you don't like when people are homeless either, right? It ruins the aesthetic.

Rents are even higher than mortgages now and home ownership is hitting the record low. I'm glad this is happening.

We're not talking about homeless people. The people who will benefit from this are buyers with the income to afford the house but crappy credit

[Anonymous]

Anonymous wrote:Excuse me while I go tank my credit

sure, tank your credit and then ask for a loan and see how easy your life will be.

[Anonymous]

I... don't understand the policy reason behind this?

I had mediocre credit (600 score) when we bought our current home and we wound up with a higher rate as a result. We also only had 10% down, which also impacted our rate. But I've worked incredibly hard for almost 15 years to improve my credit and sock away money, plus we've never missed a mortgage payment (including all our PMI payments since we were putting down less than 20%), and you're saying that because I now have a 800+ credit score and have worked diligently for two decades in order to save money and build equity, I now have to pay more money in order to help people who are now in the exact same situation I was in 15 years ago?

I don't understand. I did exactly what I was told I needed to do. Why am I the one being asked to help?