Starting May 1, homebuyers with good credit scores will have to pay higher mortgage rates and fees, as part of the Federal Housing Finance Agency’s (FHFA) plan to make housing more affordable. The FHFA will enforce loan-level price adjustments (LLPAs) for federally-backed home mortgage companies Fannie Mae and Freddie Mac, and these adjustments will apply to mortgages originating at private banks across the United States.
Mortgage industry specialists predict that homebuyers with credit scores of 680 or higher will have to pay around $40 more per month on a home loan of $400,000 due to the fee changes. Those who make down payments of 15% to 20% will have to pay the highest fees.
The new rule aims to subsidize people with riskier credit ratings who are also in the market to buy homes. It is important to note that these new rules only apply to federally-backed home mortgage companies, and private lenders may not be subject to the same requirements.
“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 told reporters. “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.”
“I am all for the first-time buyer having a chance to get into the market, but it’s clear these decisions aren’t being made by folks that understand the entire mortgage process,” Mr. Wright said.
Funny how Biden didn’t make a huge announcement about the rule, and it is quietly being put into effect.
Those supporting the rule claim that it is a great way to get people into the market, but this has all the hallmarks of what created the mortgage crisis in 2009.
There was a man that warned us about things like this but they sent him away because they didn’t like his tweets.