More mortgage shenanigans

Before we go into the latest Biden shenanigans related to mortgages, let’s visit history.

Remember the crash in 2008? Remember the mortgage nonsense? In case you don’t remember, here’s a video that describes what was going on in the mortgage market during the early 2000’s. I first saw this in the form of a PowerPoint presentation that an accountant from our Italian company shared with me. This video has been on YouTube for 14 years!

NOTE: There is some bad language!

Now for the latest. (H/T WeeWeed!)

Another way to screw people who pay their bills, and the perfect socialist “take from the rich and give to the poor” scheme. Except it isn’t just the rich who will get scalped this time.

Homebuyers with credit scores of 680 or higher will pay ~$40 per month more on a home loan of $400,000. Buyers with down payments of 15% to 20% will get socked with the largest fees. Buyers with riskier credit ratings and lower down payments will get lower rates and fees.

Washington Times

Homebuyers with good credit scores will soon encounter a costly surprise: a new federal rule forcing them to pay higher mortgage rates and fees to subsidize people with riskier credit ratings who are also in the market to buy houses.

The fee changes will go into effect May 1 as part of the Federal Housing Finance Agency’s push for affordable housing, and they will affect mortgages originating at private banks across the country. The federally backed home mortgage companies Fannie Mae and Freddie Mac will enact the loan-level price adjustments, or LLPAs.

Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees.

The new fees will apply only to Americans buying houses or refinancing after
May 1.

Lenders and real estate agents say the changes will frustrate homebuyers with high credit scores and homeowners seeking to refinance because the rule punishes them for their relatively strong financial positions.

“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 in the San Francisco Bay Area, told The Washington Times in an email message. “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.”

He said the rule will “cause customer-service issues for lenders and individual loan officers when a consumer won’t understand why their interest rate and fees suddenly changed.”

“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.


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1 Response to More mortgage shenanigans

  1. czarina33 says:

    And once again people who can’t make their mortgage payments and should never have been given loans in the first place will default and the market will collapse. All in the name of equity.


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