I'm surprised you watch Tucker and FoxNews, or at least expand their reach by continually linking to them and posting their videos here (and no doubt elsewhere). would seem to be counter to your apparent political goals.
It's a problem because it does nothing to address systemic issues that make housing in this country a mess and instead shifts the burden of fixing this issue to middle class people. And IMO it will definitely lead to people taking on loans they are incapable of fulfilling.
Why do you think that? These rates are not market-based, but neither were the previous rates market-based. These prices might be linked to credit score data, but there is no market to set the appropriate risk premium that correlates with credit scores. For all we can tell, the previous rates were charging lower credit score buyers too much for the risks they posed and this is now more close to being correct. The best a government agency can do is look at historical drivers and take on the risk of being wrong (at taxpayer expense). Markets would project future costs and distribute risks to the appropriate parties. But there is no market here, just a government agency running some models and taking guesses at the future.
I invest in multi-family, the 30 years mortgage in SFH along with the credit score system are totally rigged. I used to have mortgages and then when I started learning about investing in apartments, I realized what a sucker I was along with millions of other Americans. The rich do not need credit scores and mortgages. I sold most of my SFH, the 5 that I currently owned are being used for corporate housing for cash flow. Heck, the house that I’m currently living in is a rental. We need more and more people to wake up everyday to learn bout the game the big boys are playing, and it ain’t about the American dream that they have packaged and sold it to you.
I used to work in apartment management when I was young. Our primary investor was a doctor parking his money, but it was a magnet for international elites investing in American real estate, especially from the Middle East.
Actually, after much fluff, this "unbiased" article says... "Loan Level Price Adjustments (LLPAs) are indeed changing in a way that improves costs for those with lower credit scores and increases costs for those with higher credit scores (in many cases, anyway)." "the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores" It says that "you will absolutely NOT get a better deal on a mortgage rate if your credit score is lower". What they mean, though, when they say this is...If your credit score is low, you will still be paying more for your interest rate than if your credit score is higher. The article frequently talks about "paying less" and getting a "better deal" without clarifying those terms. But the bottom line is.... if you have a lower credit score, the new rules will improve your mortgage interest rate (make the rate lower than it previously would have been) at the cost of those who have better credit and are paying mortgages. The article also never mentions the cause of this: new rules from the Federal Housing Finance Agency that went into effect May 1st This headline from Forbes says it's "not really true'... but then, in the article, it says it's an "incomplete characterization of the situation". It says, "a borrower in the most-affected qualifying group buying a new home at the average U.S. sale price of $516,500 will pay about $3200 more under the new FHFA rules. These borrowers with credit scores between 720 and 759 taking out a mortgage for between 80% and 85% of the home’s value will pay a 75-basis-point higher fee.... which means that it actually is really true and the headline is a flat-out lie. This article then points out, "Despite the changes, however, the fees remain far greater for individuals with lower credit scores." and "“It’s not the case that every category of person with good credit will pay more." TLDR ...but from reading that Forbes article (and the article that VooDooPope posted).. ...yeah - when getting a mortgage, if you have good credit, you're probably going to be be paying more money in order to improve the interest rate that will be charged to someone who has bad credit. Other articles from news outlets: USA Today Washington Times ABC news The Hill
...while the wealthiest in the country pay less and less in taxes each year. Money goes up, **** and piss roll downhill to the plebs. Thank Reaganomics for that...
I'd dispute "in order to." People with bad credit pay one rate. People with good credit pay another. The numbers change with policy changes. But there is has never been a mechanism to determine what is "fair."
