How the US is subsidizing high-risk homebuyers

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How did the high risk buyers become less risky? Most likely by screwing the low risk buyer by forcible packaging their mortgage with high risk buyers. How about we package politician mortgage with high risk buyer instead. Let these clowns pay for there own shit ideas instead of stealing from low risk buyers.

This was not something that was voted on by politicians in Congress.
It is a plan that is being enacted by the Federal Housing Finance Agency.... led by Biden-appointee Sandra Thompson.

Democratic reforms for the greater good:

Schools:
Grade inflation, ending race neutral entrance to rigorous high schools, less focus on “the correct answer” in math,teaching to the lowest common denominator keeping remedial students with advanced learners, ending standardized tests, act or Sat for colleges…anything to slide people by. Restorative justice for kids who get punched in the face rather than expulsion.

Crime:
Not removing dangerous drivers’ licenses even when they have $12,300 in speeding tickets and kill three people with their car, elevating felony shoplifting to $1,000 in California thereby de facto allowing shoplifting and encouraging organized theft and smash and grabs mobs of teens to walk in to CVS and take things without issue, criminal justice reforms like “youth Rehabiliation act” and “second look act” that allow dangerous violent criminals to have their criminal records shielded or so that murderers get out of jail early, “restorative justice” for people who have been attacked or the use of “violence interruptors” who disrupt not violence as all studies show.

Basically, yes, as a liberal I am paying attention. I’m outraged by the loss of abortion rights, but am equally shocked at these hair brained equity proposals which basically just encourage poor behavior. Democrats think they can just lax the rules raise graduation rates or to help lower incarceration rates and it is actually screwing up the nation in the long run.

None of this has anything to do with the subject at hand.

People with good credit will pay penalty fees to those with bad credit to level payments.

It is wrong and it is unAmerican. Hopefully a court reverses it and claws back the funds in the near future.

No, we're not "all in this together".

[Anonymous]

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant

The advantage is not as big, because part of that advantage goes to the one that did not work for it. No matter how you spin it, it stinks for those that do the right thing.

If you have $1,000 in the bank, and I have $100, you have a $900 advantage. Let’s take $100 from you and give it to me, you still have an $800 advantage, so it’s fine right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How did the high risk buyers become less risky? Most likely by screwing the low risk buyer by forcible packaging their mortgage with high risk buyers. How about we package politician mortgage with high risk buyer instead. Let these clowns pay for there own shit ideas instead of stealing from low risk buyers.

This was not something that was voted on by politicians in Congress.
It is a plan that is being enacted by the Federal Housing Finance Agency.... led by Biden-appointee Sandra Thompson.

Democratic reforms for the greater good:

Schools:
Grade inflation, ending race neutral entrance to rigorous high schools, less focus on “the correct answer” in math,teaching to the lowest common denominator keeping remedial students with advanced learners, ending standardized tests, act or Sat for colleges…anything to slide people by. Restorative justice for kids who get punched in the face rather than expulsion.

Crime:
Not removing dangerous drivers’ licenses even when they have $12,300 in speeding tickets and kill three people with their car, elevating felony shoplifting to $1,000 in California thereby de facto allowing shoplifting and encouraging organized theft and smash and grabs mobs of teens to walk in to CVS and take things without issue, criminal justice reforms like “youth Rehabiliation act” and “second look act” that allow dangerous violent criminals to have their criminal records shielded or so that murderers get out of jail early, “restorative justice” for people who have been attacked or the use of “violence interruptors” who disrupt not violence as all studies show.

Basically, yes, as a liberal I am paying attention. I’m outraged by the loss of abortion rights, but am equally shocked at these hair brained equity proposals which basically just encourage poor behavior. Democrats think they can just lax the rules raise graduation rates or to help lower incarceration rates and it is actually screwing up the nation in the long run.

None of this has anything to do with the subject at hand.

People with good credit will pay penalty fees to those with bad credit to level payments.

It is wrong and it is unAmerican. Hopefully a court reverses it and claws back the funds in the near future.

No, we're not "all in this together".

I listed all that stuff to show that in addition to these sorts of socialist loan policies that penalize savers there are a bunch of other policies (crime and education) that are in this same vein of lowering standards or penalizing high achievers (ie advanced students or people who don’t break the law by racking up thousands in speeding tickets), so yes it does have a lot to do with the subject. It’s this whole lowering of societal expectations and standards to just let freeloaders or scofflaws to skirt by at others expense.

[Anonymous]

What could possibly go wrong making it easier for people with terrible finances to own homes?

Oh wait, that's right, 2008.

[Anonymous]

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant.

Think about it like this.....

They say the average amount the person with good credit will pay extra is $40/mo. That is nearly $500 annually. Over the course of a 30 year loan, that is $15,000. And, that is without any interest added.
That sucks. People who have done the right thing... worked on improving their credit score and saving for a down payment should not be penalized.

[Anonymous]

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant.

If you're just a number in an actuarial table calculating risk, it's much more fair than a politician imposing their idea of fair by putting their thumb on the scale. This is what was happening in the early to mid 2000's before the subprime debacle hit. Numbers were ignored and the tax payer got bent over in the end to cover the disaster. How many times do we have to go thru this?

I especially abhor changing tbe definitions of words to skirt what's going on. People are getting punished and there's favoratism going on (unequal treatment).

[Anonymous]

Anonymous wrote:

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant.

If you're just a number in an actuarial table calculating risk, it's much more fair than a politician imposing their idea of fair by putting their thumb on the scale. This is what was happening in the early to mid 2000's before the subprime debacle hit. Numbers were ignored and the tax payer got bent over in the end to cover the disaster. How many times do we have to go thru this?

I especially abhor changing tbe definitions of words to skirt what's going on. People are getting punished and there's favoratism going on (unequal treatment).

But, this administration will call this "equity."

[Anonymous]

Anonymous wrote:I would like to hear from anyone who thinks this is a good idea.

Even Obama's top housing advisor, David Stevens, is shocked....
“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.”

How the US is subsidizing high-risk homebuyers — at the cost of those with good credit

A little-noticed revamp of federal rules on mortgage fees will offer discounted rates for home buyers with riskier credit backgrounds — and force higher-credit homebuyers to foot the bill, The Post has learned.

Fannie Mae and Freddie Mac will enact changes to fees known as loan-level price adjustments (LLPAs) on May 1 that will affect mortgages originating at private banks nationwide, from Wells Fargo to JPMorgan Chase, effectively tweaking interest rates paid by the vast majority of homebuyers.

The result, according to industry pros: pricier monthly mortgage payments for most homebuyers — an ugly surprise for those who worked for years to build their credit, only to face higher costs than they expected as part of a housing affordability push by the US Federal Housing Finance Agency.

“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.

https://nypost.com/2023/04/16/how-the-us-is-subsidizing-high-risk-homebuyers-at-the-cost-of-those-with-good-credit/

And the rest of us are subsidizing the idiots who think building houses in the designated storm areas is a good idea. Take note FL

[Anonymous]

Anonymous wrote:

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant

The advantage is not as big, because part of that advantage goes to the one that did not work for it. No matter how you spin it, it stinks for those that do the right thing.

If you have $1,000 in the bank, and I have $100, you have a $900 advantage. Let’s take $100 from you and give it to me, you still have an $800 advantage, so it’s fine right?

No it is not fine. It would be a $700 advantage.

[Anonymous]

Favoritism to slow pay deadbeats.

[Anonymous]

Anonymous wrote:

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant.

Think about it like this.....

They say the average amount the person with good credit will pay extra is $40/mo. That is nearly $500 annually. Over the course of a 30 year loan, that is $15,000. And, that is without any interest added.
That sucks. People who have done the right thing... worked on improving their credit score and saving for a down payment should not be penalized.

According to the article, you go from a .25% charge to a 1% charge if you have good credit, while bad credit drops from 3.5% to 1.75%.

[Anonymous]

In theory, this is to help poor people.

In practice, quite different.

As a very young teacher, I began working with an extremely low salary.
I had a roommate--a friend from college--we made the same amount of money.

I had car payments. She did not. She had an old car that her parents had given her. They also gave her a trip to Europe for college graduation.

Four years later:

I had paid off my car and continued to put the allotment in savings.
I had a Master's Degree by going to school at night and in the summer--much of which was paid for by the school system.
The Master's Degree came with a salary increase.

Roommate:
Bought new car, so had car payments,
Constantly in debt and writing bad checks.
She did not have a Master's Degree--though she had the same opporutunity.to have the school system contribute to a Master's Degree--which would have increased her salary.

Why did she write bad checks?
When we ate out together, she always chose whatever she wanted. She never considered the cost.
I always looked at the prices first. "Read the menu from right to left."

She spent money on frivolous things--very expensive non-prescription sunglasses, for example. If she liked a pair of sandals, she bought thee pair in different colors. Even though she couldn't pay her bills, she would write a check for what she wanted.
Her credit rating would be poor because she did not pay her bills.

Do you really think a person with a poor credit rating is a good risk for a mortgage? That you should be rewarded for poor choices?

I understand trying to help people who are struggling. But, the credit rating reflects more than income. It is an indicator of risk.

[Anonymous]

Will these changes actually change homebuyer behavior? Will 30%+ downpayments or shorter loans become more appealing? Will that lead people who would be bidding up "good neighborhoods" to target up and coming neighborhoods instead? This could have fascinating unintended implications.

[Anonymous]

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant.

They earned that advantage. And now some of it is taken away to subsidize others, who are much more risky and more likely to be foreclosed on. Did you not learn anything from the last crash when some people didn’t have to meet qualification for mortgage?

[Anonymous]

Anonymous wrote:

jsteele wrote:

Anonymous wrote:I have been searching for more information on this plan. What I did find is that this is for people who purchase or refinance after May 1.
Regardless of whether those with a high credit score and 15% or 20% down payment have an advantage already, they are still getting punished for having good credit and saving for a down payment.

They are not getting punished. Buyers with high credit scores and large down payments have an advantage now. They will continue to have an advantage after May 1. The advantage is not as big, but it is still significant

The advantage is not as big, because part of that advantage goes to the one that did not work for it. No matter how you spin it, it stinks for those that do the right thing.

If you have $1,000 in the bank, and I have $100, you have a $900 advantage. Let’s take $100 from you and give it to me, you still have an $800 advantage, so it’s fine right?

And we wonder why kids think “why should I have to work hard if there’s no real advantage to me?”