Biden rule will redistribute high-risk loan costs to homeowners with good credit

[Elderberry]

Fox News by Michael Lee 4/19/2023

Interest rates for mortgages have roughly doubled over the past year

A Biden administration rule is set to take effect that will force good-credit home buyers to pay more for their mortgages to subsidize loans to higher-risk borrowers.

Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage, according to a Washington Times report Tuesday.

"The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well," Ian Wright, a senior loan officer at Bay Equity Home Loans, told the Times. "It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing."

The Federal Housing Finance Agency, which oversees federally backed home mortgage companies Fannie Mae and Freddie Mac, has long sought to give consumers more affordable housing options. But those who work in the industry believe the new rules will only serve to frustrate and confuse people.

More: https://www.foxnews.com/us/biden-rule-redistribute-high-risk-loan-costs-homeowners-good-credit

[mountaineer]

Handing out home mortgages to people who wouldn't (in a sane world) qualify for them has gone so well in the past:

A Decade Later
Angelo Mozilo and his doomed mortgage machine
by Matt Egan   
 June 6, 2018: 6:34 AM ET

Angelo Mozilo got rich selling the American Dream. Then he became the face of America's mortgage nightmare.

Mozilo, the perpetually tanned son of a butcher from the Bronx, co-founded Countrywide Financial in 1969. He built it into an unstoppable mortgage machine that made it easy — evidently too easy — for millions to own a home.

Between 1982 and 2003, as home prices boomed and Countrywide's stock price zoomed 23,000%, Mozilo gained a reputation in the industry as a genius and a rainmaker.

He turned Countrywide into the No. 1 mortgage company.  ...

 Yet Mozilo's quest to dominate the mortgage market led to a race to the bottom at Countrywide. The company repeatedly relaxed its borrowing standards, lending to people with weaker credit scores who sometimes didn't even have jobs.

Mozilo helped pioneer the use of subprime mortgages and other so-called exotic products. Hailed as brilliant at the time, these dangerous mortgages blew up when the unthinkable happened: Home prices collapsed.  ...

CNN

[DCPatriot]

So...IOW, homeowners will "good credit" will end up paying the equivalent of monthly Private Mortgage Insurance (PMI) despite how much equity they have in the property. 

[GtHawk]

Hey, my credit sucks, sounds like a good time to buy a home........and then months later file BK after all it's the irresponsible American way! Oops, it's a Biden/democrat plan so no doubt I'm too White to begin with and then they will probably look at party affiliation, posting history.....

[Kamaji]

Hey, my credit sucks, sounds like a good time to buy a home........and then months later file BK after all it's the irresponsible American way! Oops, it's a Biden/democrat plan so no doubt I'm too White to begin with and then they will probably look at party affiliation, posting history.....

Good plan, 'cause you'll get to apply the homestead exemption and retain the house.

[goatprairie]

Der Fuhrer has issued a new diktat designed to destroy America. You vill pay for the bad debts of others. I vill take away your gas powered cars, lawn mowers, and other similar engines. You vill obey your Fuhrer.
Ein Reich, Ein Volk, Ein Biden!!

[240B]

Good plan, 'cause you'll get to apply the homestead exemption and retain the house.

Biden is incentivizing low income and bad credit. The government will shower you with money. No need to 'work' (like a putz).
Identity theft will now be scouring the internet for those with the worst (opposite of the best) credit rating possible.
Jail time and minority status is now a plus.

[DefiantMassRINO]

Is this a "rule" or a law?  If not a law, the Republican House could pass a law to stop this ... when they are not busy doing the bidding of Trump's legal defense team.

I earned my credit rating by working hard, living below my means, and saving my money.

This ant is tired of subsidizing grasshoppers.

[240B]

You get what you vote for.
There is no single chance in hell a Trump admin would do ANY of the things Biden is doing to destroy America.