IDK about this grand new idea. Don't follow Fox. Haven't heard about this anywhere else. So, is it TRUE that people who have a great score are being told their payment will have some money to help insulate lenders from losses created by others?
There is no Sign by the door at the local store that says

Our prices that You Pay would be lower if people didn't steal.

But the customers of every business Pay for the losses and thefts ,the costs of Doing business, including the taxes they have to pay. Unless you're a lefty, then businesses just pay their taxes out of some Magical Money Bag.. But that is a whole other thread.



The Email


Financially, people live and die by their credit scores.

Not literally, of course, but we all know this is true. A good credit score allows a person to save tons of money on home and auto loans, get better interest rates on their credit cards, to say nothing of having more available credit overall.

When my business collapsed, it wrecked my credit. I’ve spent years and years trying to rebuild it, all in hopes of buying a home for my family and ending us renting one once and for all.

Upgrade to paid

Yet it seems that President Joe Biden seems to think those of us who do that are chumps.

From Fox News:

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 “overcomplicating things” is bad, sure, but for me, the issue is that this basically seeks to penalize those who did everything right in favor of those who couldn’t be bothered to do so.

While homeownership is a good thing and is often termed as a key step in creating wealth, the reason we use credit scores to determine if someone should get a loan is because it’s been shown to be a pretty decent indicator if someone can be trusted to make the payments.

This idea of providing home loans to people with less than good credit, though, isn’t new. Remember 2008?

The financial crisis we endured that year was, in part, due to an attempt to provide home loans to people who wouldn’t otherwise qualify that colossally backfired when—shockingly—a lot of those people turned out to be unable to keep paying for their houses.

The entire economy darn near collapsed, or so it seemed at the time.

Now, though, some people are expected to foot the bill for this social experiment of giving loans to people who wouldn’t otherwise qualify for them and thus penalizing us for either keeping our credit histories clean or fixing our credit after past mistakes.

Keep in mind that $40 doesn’t sound like much, but that’s per month, meaning it’s $480 per year. That’s an additional $14,400 over the course of a 30-year loan.

And not for anything they might remotely benefit from and could, arguably, result in bigger problems for them later.

Some might not think much of, say, a tax that will improve the infrastructure around their new home. In the long run, it’ll probably benefit them a great deal if that were the case.

This isn’t that, though. This is about penalizing certain Americans to facilitate home loans to people who haven’t shown they can be trusted to pay that kind of money back.

Again.

Since poor credit ratings are generally the result of someone not paying back loans or paying their credit card debt, we’re rewarding people who did things wrong on the backs of those who didn’t.

But hey, this is the Biden administration. What do you expect?

IDK, that's why I posted it and included
Me? Waddo I know?
Unlike the store, where anyone can come in, a mortgage company chooses who they want to loan money to. Kinda seems wrong to punish the responsible for the actions of those people who the company loaned to that didn't handle it right. And for the lower credit score applicants, they have the Higher interest rates, like insurance companies that tore me a new one for being under 26? IIRC..
They didn't charge the good drivers over that age more, AFAIK, but if you were a man, under 26, your rates were considerably higher than what a woman would.

I don't think it's Right to charge the people who navigate the world responsibly to cover for the company's bad decision-making. It's Not as if they are totally screwed. They have the house.. If they have a way to avoid the consequences for their loose lending practices they have no incentive to be more careful.
YaKnow, it's a little bit like a security clearance. You gotta pass a review, you get asked questions and your background gets snooped. They should talk to people from your past.. I've heard they do,, and sketchy people just didn't get one. Well, those days are long gone.. It's Not Just Sam,, but that is a juicy laugh, that someone who was in charge of nuclear waste disposal is using his obvious mental health issues as a defense is seriously a hoot. Hey! Who could have known he was a nutjob? It's not like he advertised it. Ohh, waitaMinnitt!!

But then again I do not see the advantages to creating easier lending to people with riskier credit, but there must be some advantages when it comes to equity like real-estate.

Yes, there’s an advantage, it’s called votes….. Joe Biden is a pathetic POS old man who’s a puppet for the leftist socialist scums pulling his strings.

 So I waited for 7 closings to take place under the new ratios to confirm that the updated rates will not actually increase cost to ALL high credit score humans purchasing homes within the confines of geographically recognized and titled US land.

 I though it suspicious that every single example of how the new ratios worked only looked at a specific credit score range.  This is because an overall look at the entire issue would reveal a larger truth, not just the cherry-picked truth an article wants you to see.

 Here is a direct example from a home purchase:  

Credit Score range: 640 to 659
Borrow range:  75.01 percent to 80%
Previous fee: 3%
Current fee: 2.25%

 Would you rather pay 3% or 2.25%?


 There are other misleading components to this, for instance calling it a "Biden" law when it isn't a White house policy or even started by this Administration.  This process actually started in 2018.  I'd outline how, but facts obviously don't matter when you want to blame a POTUS for something.  TDS, BDS, it's all more important than actual knowledge of real events that actually happened, so blame whatever POTUS you want.

 For instance it is not mathematically possible to save money by having a lower credit score under the new system.  People who refuse to Observe the math will argue this, but anyone with 2 minutes and a calculator will Observe the truth.

 LLPA "discount points" are actually additional fees.  They are not reductions in amounts paid.

 The higher the credit score, the less you pay, every single time.  But some additional fees will be higher.  This reduction in fee-gap is something that needs addressed if it for the purpose of distributing funds downward on the credit score scale.  But there are no subsidies, or system in place to implement them.

 If one includes all cost, not cherry-picked cost, the cost of buying a home will still be higher for lower credit score humans.

 The rate changes do not universally benefit everyone, and questioning why higher credit score humans have in some cases a shift upward in fee percentage should happen.  Thinking low credit score humans "pay less" is incorrect and thus a flawed - or dishonest - way to challenge the new rates.  



https://enactmi.com/enact-mi-rate-cards-and-risk-based-pricing

 
https://www.fhfa.gov/Media/PublicAffairs/Pages/Statement-from-FHFA-Director-S...