Posted on 04/20/2023 12:33:16 PM PDT by Twotone
Just when you think the Biden administration can’t possibly have any more awful ideas, his team rolls out a plan to punish Americans with high credit scores to subsidize high-risk homebuyers.
On Wednesday, The Washington Times reported that starting May 1, Americans purchasing a new home or refinancing their existing mortgage can expect to pay higher mortgage rates and monthly fees if they have a higher credit score. Americans with lower credit scores and smaller down payments will be given better rates. In other words, Biden is essentially stealing from the rich to give to the needy by adjusting the fees on loan-level price adjustments.
“The changes do not make sense,” senior loan officer at Bay Equity Home Loans Ian Wright told the Times. “Penalizing borrowers with larger down payments and credit scores will not go over well. 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.”
It makes sense if you are a member of the Biden administration. In the name of equity, the Biden administration seeks to close the racial gap in homeownership. To do this, they are enacting numerous changes to the housing market that will benefit those at the lower end of the spectrum — which tend to be minorities for a variety of reasons.
So, according to The New York Post, industry experts say that its going to wind up backfiring.
“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 expert told the Post.
Even former Obama officials are sounding the alarm.
“It’s unprecedented,” David Stevens, Federal Housing Administration commissioner under President Barack Obama, told the Post. “My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move.”
The push to put “riskier mortgages” in the hands of those who couldn’t otherwise afford homes also could cause disruption should a recession hit — which the Federal Reserve is predicting.
None of this matters to President Joe Biden and his ilk. They never let a bad idea get in the way of equity.
UGH, will we even make it thru the next two years
Seems like this nightmare will never end. Every day it’s something else.
/sarc
I guess Democrats who voted for these clowns agree and gladly will pay more.
Easy fix. Don’t borrow money. Live in your means.
Like the people that take out a 7 yr loan on a new car. Insane. Buy and drive an old one like I do. Besides saving taxes too. I put new shocks, new ball joints and new brakes on my old Nitro for less that the sales tax amount on a new car. 200K and still running fine.
Isn’t this how the old housing bubble in that blew in 2008 happened? You had loans subsidized and regulated through the government to make it easier for high risk debtors to get them?
Something about all this seems counterintuitive. Down is up, white is black, night is day, right is wrong. Just more of the affirmative action reverse psychology this regime adheres to so tenaciously. Are they being wrong-headed on purpose, or are they really that sh*thouse-rat crazy?
Obama (pi$$ be upon him) accused the mortgage folks of red-lining and basically forced those folks to start making risky loans (CRA on steroids).
Could this be Ver 2.0 ?? or posibly reverse red-lining ...
Just when we think that the phanatics, phreaks, and phags in this administration are out of stupid ideas they open a new barrel ...
FJB. I’ll buy out of country before I buy here.
There also seems to be a serious lack of details here. Since when does the Federal government set interest rates for mortgages? I signed a mortgage on a home a few years ago, and the interest rate was negotiated between me and various lenders.
Punish the responsible to reward the irresponsible.
Just following the same playbook used for college financial aid.
Joe Biden’s idiocracy!
While it does feel redistributionist, the primary goal of this is to enable the federal government to keep the housing bubble from collapsing. It greatly expands the number of buyers by essentially rewarding risky loans backed by the government.
That should fix the train wreck housing market.
Does anyone know how they are doing this? I've seen a half dozen articles saying that they are doing it, but none tell the method or who gets the extra money from better borrowers.
Individuals with excellent credit scores typically do not opt to refinance their mortgages at elevated interest rates, which is one of the reasons their credit scores are high.
I only make purchases with cash on hand, and if I don’t have the cash, I refrain from buying until I can afford it.
How is this even possible?
Ditch McConnell’s fault.
This is obama.......won’t be satisfied ‘till the hood rats are living next door
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