http://www.newsweek.com/biden-raises-costs-homebuyers-good-credit-help-risky-borrowers-1795700
In January, as part of their equity in housing initiative, the Biden Administration and FHFA had tweaked the risk-based pricing matrix called LLPA (Loan Level Price Adjusters). The new changes were designed to help consumers with lower credit ratings and lower down payments. The policy is in effect for new loans delivered to Fannie Mae or Freddie Mac post-closing on or after May 1st. These changes do not affect FHA, USDA, or VA loans.
This new federal rule could raise the monthly mortgage payments of buyers with good credit scores by over $60 a month, while riskier borrowers will get more favorable terms because their fees will be reduced.
FHFA lowered the penalty "points" for borrowers with lower credit scores and lower down payments to narrow the gap in the degree of point charges compared to those low credit risk borrowers.
Does it pay to just be irresponsible and have bad credit to secure a loan for less?
Homeownership is a privilege and something everyone should strive for. That means working toward a good credit score, paying your bills, and earning it. We already have down payment assistance programs, 1st-time buyer incentives, and down payment assistance to help those less affluent.
I personally do not think it is fair to charge the person who is responsible more because of others who really didn't put in the effort.
I could have posted this in work as maybe work volume will increase. Probably not, but think it
is more political and a Biden way of again of passing another agenda that doesn't benefit everyone. jmo
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