How the US is subsidizing high-risk homebuyers

[Anonymous]

Anonymous wrote: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.

Best post in this thread.

[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?

Is $800 not an advantage worth working for? If things are so easy for irresponsible people then why are you still paying your mortgage every month? Oh yeah because there is an actual advantage to being responsible despite your hyperbole.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Best post in this thread.

Nope. Tired old cliche. “Poor people didn’t work as hard” is true in some cases but not universally.

[Anonymous]

Socialism is a disease.

[Anonymous]

If it wasn’t for the abortion position, as a Democrat, this makes me want to vote for a Republican. They actually understand capitalism. The democrats seem to want to do anything to punish other or bring people down to a certain level. It’s fked up.

[Anonymous]

Anonymous wrote:If it wasn’t for the abortion position, as a Democrat, this makes me want to vote for a Republican. They actually understand capitalism. The democrats seem to want to do anything to punish other or bring people down to a certain level. It’s fked up.

Do they understand capitalism? They're great at crony capitalism and they like tax cuts and cutting some regulations (not so much others), but republican administrations and steady growth are two things that don't seem to go together lately

[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.

I understand what you are saying here. But make no mistake- based on the current system, those with good credit are getting punished by this change. They will pay more than they would have now, to subsidize those with bad credit.

You can make a case whether that should or should not happen, but lets not gloss over that that is whats happening here with this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Best post in this thread.

Nope. Tired old cliche. “Poor people didn’t work as hard” is true in some cases but not universally.

The people who benefit the most are middle class people who are financially undisciplined. Poor people don't really buy homes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Best post in this thread.

Nope. Tired old cliche. “Poor people didn’t work as hard” is true in some cases but not universally.

The people who benefit the most are middle class people who are financially undisciplined. Poor people don't really buy homes.

This. You still need enough income to qualify for the loan and a down payment. This benefits people with good salaries who missed payment or carry huge balances

[Anonymous]

This is a bad decision. There’s a reason why people with poor credit scores pay more, they are higher risk. It makes no sense to charge people with less risk more. They are being penalized for making good choices and working hard.

If they want make impactful change, what about charging people more to live in high risk areas, such as Florida, or parts of the southwest where there are significant water issues.

[Anonymous]

Doesnt insurance already do that?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote: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.

Best post in this thread.

Nope. Tired old cliche. “Poor people didn’t work as hard” is true in some cases but not universally.

The people who benefit the most are middle class people who are financially undisciplined. Poor people don't really buy homes.

This. You still need enough income to qualify for the loan and a down payment. This benefits people with good salaries who missed payment or carry huge balances

And, face greater risk of foreclosure. Makes no sense.

[Anonymous]

Can someone show the current and new rate surcharge tables side by side?

[Anonymous]

More crap securities

Better keep pushing the high speed money printing button

[Anonymous]

Anonymous wrote:If it wasn’t for the abortion position, as a Democrat, this makes me want to vote for a Republican. They actually understand capitalism. The democrats seem to want to do anything to punish other or bring people down to a certain level. It’s fked up.

The Republicans are so stupid. Let the abortion issue go and focus on what really matters: keeping more of what you earn to be able to take care of yourself and those you love. I am a registered Republican but I've been voting dem because I just couldn't bring myself to vote for the party so intent on restricting access to abortion. But yeah this mortgage BS is infuriating. Might have to go back to voting red.