Get ready to pay more for you mortgage

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Get ready to pay more for you mortgage

Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

So here is something that is coming on May 1st. I just heard about it.

Essentially if you have a good credit score (680 or above) you will pay more in mortgage fees to help those with poor credit buy a house.

https://www.foxnews.com/us/bid...

Expect to pay $40 more a month on a 400k mortgage.

This has me very angry. I don't want to pay for others who didn't do things correctly and tanked their credit.

This is communism at work. Good golly....

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Reid Chauvin
Lender · Nashville TN - Licensed in AL AR DC FL GA LA MD TN, TX and VA · Member since 2021 · 583 posts · 338 votes
3y

A product of the administration's drive to expand homeownership to underserved communities. Seems pretty heavy-handed to me with this notion that you need to penalize one group to raise up another. I worked at Fannie Mae for a few years (during which happened to be under the previous administration) and the efforts to expand homeownership seemed much more tactful and balanced. Hopefully will revert back to a more targeted and nuanced approach with future administrations.

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  • Reid Chauvin
    Lender · Nashville TN - Licensed in AL AR DC FL GA LA MD TN, TX and VA · Member since 2021 · 583 posts · 338 votes
    3y

    A product of the administration's drive to expand homeownership to underserved communities. Seems pretty heavy-handed to me with this notion that you need to penalize one group to raise up another. I worked at Fannie Mae for a few years (during which happened to be under the previous administration) and the efforts to expand homeownership seemed much more tactful and balanced. Hopefully will revert back to a more targeted and nuanced approach with future administrations.

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  • Adam Martin
    Rental Property Investor · Member since 2020 · 1k+ posts · 1k+ votes
    3y

    We are starting to pay for all those participation trophies we gave out as adults expect them to continue.  I'm not sure how these things even pass but if some borrows are such a risk that they need to be offset by higher fees on responsible borrowers maybe they are not ready to be homeowners yet. I seem to recall a time not that long ago when buyers who were higher risk were allowed to buy homes and while the situation was much more reckless then than now it didn't end well for the housing market and I hope we don't repeat that.  

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Trevor Knorpp, let's not go there. That isn't something anyone wants. If you want to fix things, vote in new people.

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  • Jake S.
    Rental Property Investor · MN · Member since 2017 · 864 posts · 555 votes
    3y
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  • Wayne Bolen
    Leander, TX · Member since 2014 · 55 posts · 24 votes
    3y

    This is for Fannie Mae and Freddie Mac correct? One more reason to start doing business with local banks who offer portfolio loans and service them in house.

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  • Trevor Knorpp
    Member since 2023 · 29 posts · 11 votes
    3y

    @Michael Baum I am not serious, only joking. But seriously, do you think the government will stop here when this gets through the system?

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y

    Luckily most all of my properties are paid for! 

    With just a few exceptions. 

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    @Wayne Bolen details are still coming out as this was done on the QT. I would assume it is for federally insured loans.

    @Trevor Knorpp I figured as much. No, not with this particular administration. I am just not sure if there will be some kind of lawsuit to halt it or not. It is pretty amazing how much stuff is getting pushed through that will cost us a ton of dough.

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  • Trevor Knorpp
    Member since 2023 · 29 posts · 11 votes
    3y

    @Michael Baum I'm so sick of these attempts at communist advances

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  • Afoma Okwudiafor
    Member since 2019 · 25 posts · 12 votes
    3y

    Are there any fact sources to this apart from fox? I doubt anyone will agree to this policy.

    Credit worthiness is less about how rich a person but more about how "responsible " a person is

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  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    3y

    @Michael Baum

    I can't tell from reading the few articles I've seen on this whether this is actually a monthly payment thing, or has to do with origination fees.  It doesn't seem to be being covered very much.

    Definitely doesn't seem right IF it affects the entire mortgage market... but again, I can't tell yet...

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Nicholas L.:

    @Michael Baum

    I can't tell from reading the few articles I've seen on this whether this is actually a monthly payment thing, or has to do with origination fees.  It doesn't seem to be being covered very much.

    Definitely doesn't seem right IF it affects the entire mortgage market... but again, I can't tell yet...

    Yeah, the story is still forming. I have no idea why it isn't getting more coverage. I think things are in flux still and of course something like this has no cap. They can just keep raising the fees.
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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Afoma Okwudiafor:

    Are there any fact sources to this apart from fox? I doubt anyone will agree to this policy.

    Credit worthiness is less about how rich a person but more about how "responsible " a person is

    I just chose Fox as it was one of the first to cover it. It is all over the place now. Do some searches and you will see.

    I just found a post from 3 months ago talking about it - https://www.biggerpockets.com/...
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  • Alex L.
    Rental Property Investor · Youngstown, OH · Member since 2023 · 128 posts · 124 votes
    3y

    While I definitely agree that this is a very bad unfair idea if true, I think that calling it "communism" just takes away from the seriousness of it and sort of makes it sound like a silly overblown right-wing talking point... because that's not communism. That's just stupidity.

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Alex L.:

    While I definitely agree that this is a very bad unfair idea if true, I think that calling it "communism" just takes away from the seriousness of it and sort of makes it sound like a silly overblown right-wing talking point... because that's not communism. That's just stupidity.

    "From each according to his ability, to each according to his needs" - Karl Marx.

    I interpret this kind of move as a Marxist thing which of course is the basis for communism.

    I don't think it takes away from the seriousness at all. They are essentially taking more from people perceived to have more and giving it to those who are perceived to have less.

    It might become a talking point, but that doesn't mean it isn't correct.


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  • Alex L.
    Rental Property Investor · Youngstown, OH · Member since 2023 · 128 posts · 124 votes
    3y
    Quote from @Michael Baum:
    Quote from @Alex L.:

    While I definitely agree that this is a very bad unfair idea if true, I think that calling it "communism" just takes away from the seriousness of it and sort of makes it sound like a silly overblown right-wing talking point... because that's not communism. That's just stupidity.

    "From each according to his ability, to each according to his needs" - Karl Marx.

    I interpret this kind of move as a Marxist thing which of course is the basis for communism.

    I don't think it takes away from the seriousness at all. They are essentially taking more from people perceived to have more and giving it to those who are perceived to have less.

    It might become a talking point, but that doesn't mean it isn't correct.



     I don't think that quote can be readily applied to mortgages and credit scores, though. That just sounds silly. Marxism would not entertain those things to begin with in the first place. Putting that aside and agreeing to disagree though, I agree that a talking point can be correct... but calling it "communism" and sharing a link from Fox News in the same breathe just sort or elicits an eye roll and no further investigation because it sounds overblown, because Fox News calls everything communism.

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Sigh @Alex L., whatever man. It's just a link with info. This hasn't been covered much until now and it was the first place that had some comprehensive info. Fox is the most watched news source in the US. Read into what you will. 

    Regarding the quote, I think you are reading too much into everything. It's the basics of the changes, not the reasoning.

    You have more, we will take it and give it to those who we think need it more than you. That is the basics. It doesn't matter what the reasoning is.

    The tyrant will always find a pretext for his tyranny. 

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  • Justin KurpiusPro Member
    Rental Property Investor · Member since 2017 · 84 posts · 41 votes
    3y
    i really hope that many years from now, people will look back at history to think "how dumb were these politicians?". The higher the down payment, the higher the interest rate? And heck, just for snicks we will double down to say the higher your credit score the higher your interest rate.

    what makes this funny, this is one of the smartest decisions this administration has made! Get em Joey

    Quote from @Michael Baum:
    So here is something that is coming on May 1st. I just heard about it.

    Essentially if you have a good credit score (680 or above) you will pay more in mortgage fees to help those with poor credit buy a house.

    https://www.foxnews.com/us/bid...

    Expect to pay $40 more a month on a 400k mortgage.

    This has me very angry. I don't want to pay for others who didn't do things correctly and tanked their credit.

    This is communism at work. Good golly....

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  • Justin KurpiusPro Member
    Rental Property Investor · Member since 2017 · 84 posts · 41 votes
    3y
    Quote from @Reid Chauvin:

    A product of the administration's drive to expand homeownership to underserved communities. Seems pretty heavy-handed to me with this notion that you need to penalize one group to raise up another. I worked at Fannie Mae for a few years (during which happened to be under the previous administration) and the efforts to expand homeownership seemed much more tactful and balanced. Hopefully will revert back to a more targeted and nuanced approach with future administrations.


    fyi - when government steps into a free market it never ends well.
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  • Afoma Okwudiafor
    Member since 2019 · 25 posts · 12 votes
    3y
    Quote from @Michael Baum:
    Quote from @Afoma Okwudiafor:

    Are there any fact sources to this apart from fox? I doubt anyone will agree to this policy.

    Credit worthiness is less about how rich a person but more about how "responsible " a person is

    I just chose Fox as it was one of the first to cover it. It is all over the place now. Do some searches and you will see.

    I just found a post from 3 months ago talking about it - https://www.biggerpockets.com/...

     I searched around and still only finding the same fox article posted everywhere or an opinion piece.

    There are several articles posted on official websites (e.g hud) which talk about ways to make housing affordable but none talk about rewarding those with low credit

    If the administration thinks it's the right step, I am sure they will talk about it a lot and I am just not seeing it

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  • Afoma Okwudiafor
    Member since 2019 · 25 posts · 12 votes
    3y
    Quote from @Afoma Okwudiafor:
    Quote from @Michael Baum:
    Quote from @Afoma Okwudiafor:

    Are there any fact sources to this apart from fox? I doubt anyone will agree to this policy.

    Credit worthiness is less about how rich a person but more about how "responsible " a person is

    I just chose Fox as it was one of the first to cover it. It is all over the place now. Do some searches and you will see.

    I just found a post from 3 months ago talking about it - https://www.biggerpockets.com/...

     I searched around and still only finding the same fox article posted everywhere or an opinion piece.

    There are several articles posted on official websites (e.g hud) which talk about ways to make housing affordable but none talk about rewarding those with low credit

    If the administration thinks it's the right step, I am sure they will talk about it a lot and I am just not seeing it


     Here are the numbers from the Fannie Mae website. Old on top. new below

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  • Kevin Luttrell
    Lender · Orange County, CA · Member since 2019 · 299 posts · 255 votes
    3y

    For clarification - this is not a direct impact on mortgage fees or monthly payment. The loan-level pricing adjustments (LLPAs) with Fannie Mae and Freddie Mac have been adjusted so that higher credit score borrowers with higher down payments are now receiving worse pricing than they were before, and lower credit score borrowers with lower down payments are now receiving better pricing than they had been. Here is a heat map for easy reference. Top row is loan-to-value(LTV) ratio, left side is credit score.

    Most in the mortgage industry are outraged. They're basically taking money from the financially responsible and giving it to the financially irresponsible. 

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  • Michael BaumPro Member
    OP
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    Hey @Afoma Okwudiafor, there are a bunch of articles. Not sure why you couldn't find any:

    https://www.msn.com/en-us/mone...

    That is just one. You just need to improve your ninja search skills!

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  • Amy K Foster
    Member since 2021 · 3 posts · 3 votes
    3y

    https://singlefamily.fanniemae...

    May 1st chart for LLPA rule changes 

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  • Henry T.
    Member since 2022 · 1k+ posts · 1k+ votes
    3y

    Thom Hartman says its a bogus article. Seems no one can find its legitimacy anywhere. I don't know either way.

    But on a similar note, there is a proposal here in WA state, (and I'm not sure if this has gone thru), but, yet another property tax increase so that those less fortunate can have $24,000 in cash applied to their first home purchase.

    I'm writing up the rent increases right now, just in case. :)

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