Got good credit? It'll cost ya

No sir -- I did.  that is the most extreme way to swerve the fees and can be done.

I get you stand by it.  But you know if the GOP could have stopped this they would have.  They had NO CONTROL in this instance.

@wallstreetcappers

 Okay-- good enough.  I am not going to change your mind on it and am not even trying to.

I just thought you saw other things to support it.

We will simply disagree on this issue.  I think it was a poor decision and badly reasoned out.

Good intentions and may have bad consequences for all involved.  

Balancing for one group at the expense of another is never an easy task, it is not fair equally to both parties involved, but to me if I dont like Bank of America's fee structure of PNC savings rate or if I dont like the closing cost estimate from a certain lender I can seek out other options.

In the past I have even sold rate for a closing cost rebate, the rate in which the lender I was using was the same as the general market AFTER getting a closing cost rebate, so market rate was say 4% from Fannie or BOFA and I used a lender that gave a rebate for taking the 4% rate and I actually had almost zero closing costs for doing so.

Not everything can result in a perfect outcome but at least we have choices and options.

For sure, choices are good. 

If you like none of them -- continue to save and wait.

State treasurers and other top finance officials from 27 states on Monday urged President Biden to end what they said was his "unconscionable" policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers, and warned Biden’s plan would be a "disaster."

The controversial policy has been attacked by both Republicans and Democrats, including President Obama’s former Federal Housing Administrator. On Monday, financial officers from 27 states weighed in and said it was clear the policy was a mistake even before it takes effect.

"It is already clear that this new policy will be a disaster," they wrote in a letter led by Pennsylvania Treasurer Stacy Garrity that was sent to Biden and FHFA Director Sandra Thompson. 

The state officials said that while expanding homeownership is a worthy goal, the forced subsidization of risky loans isn’t the way to do it.

I see what you did there in the title Mugg . Nice wordplay . Well played sir 

@UNIMAN

 So it was good when the lesser score borrower paid over 3 pts in closing fees and nobody is up in arms about that but when the good borrower has to pay 1 pt its time to rattle the GOP cages?

Even at the proposed changes the fee burden is strongly on the lower score borrower. Keep in mind that a 650 score is not garbage either, its middle of the road maybe someone with limited score history or even as small as a missed payment or two. You are not talking sub prime toxic garbage, banks are not lending to sub prime much at all, I think the 679 and lower score is actually quite decent.

I just want things fair for everybody .

It doesn’t make sense that we live in a world where people are starving from hunger , don’t have clean drinking water , and don’t have the access to the necessary medicine to stave off illness …….

but yet we have the money to feed the war machine , and to put on ridiculous awards shows that are full of pomp and circumstance , where we see ill fitting tuxedos and smug smiles for the cameras from both goofball celebrities and politicians with their atrocious drug habits and filthy sex addictions .

Is this real life ?

Do people really feel like sweeping things under the rug forever ?

This is lunacy . This is an abomination . We are the fools fooling ourselves by knowingly acting foolish and being ok with it .

As long as we stay selfish with our full bellies and warm houses where our giant egos have the shelter to continue their maniacal growth it’s all good I guess right ?

My credit score and your credit score don’t matter much to the homeless guy sitting on the park bench in your local town whose pants have been full of shit since last Wednesday or the kid in Africa with the 8 flys congregating around his one working eyeball …..

This is disgusting . Enjoy your money gentlemen . I heard Heaven does indeed have a bank so yes you can take it with you .

God Bless 

 Just to note......this "policy" was implemented by FHFA director Sandra L. Thompson, who was nominated for the position by Biden in Dec. 2021 then confirmed in June 2022.

That ONLY works for the high-credit folks.  
The LOWER risk ones will end up here, more and more.  Then they are stuck with more of a higher-risk folks as a number than they currently have it balanced at.  To offset the expected increase in the number of high-risk they will now have to charge more to the low-risk that apply.  But what happens if they do shop around?  They are the ONLY ones that CAN shop around.  

Bottom line is the Left WANT high-risk folks to have a house AND a better house than they should be able to afford. 

This is another disaster in the making. 

So 679 is high risk foreclosure types huh?

There are many programs for average to fair credit scores which this adjustment benefits. I did not see anywhere that this is for sub prime junk zero down no closing costs 120% LTV borrowers, but maybe I missed that part.

Hysteria can really do a number on you especially if you are seeking it out and want to be up in arms about those nasty lefty liberals.

679 credit score is far far far from garbage..

It is a risk assessment management that they do.  Lots of experience has shown them to be proven right that a 740 will be a lower risk than a 640; and a 640 is lower risk than a 540. 
It is what it is.  Not hysteria.  They have to do it or they would not stay in business.  

Now a non-business person is trying to run their business for the wrong reasons.  

Post #81 was just reporting the news.

Like this; Many critics have blasted new rules from the Biden Administration that will force good-credit homebuyers to subsidize the costs of buyers with poor credit. One former Obama housing official is calling out the "unprecedented" move, arguing this is "not the way" to bring in more home buyers. 

This is an unprecedented move," Former Federal Housing Administration Commissioner David Stevens said on "America Reports" Thursday. "We can do better programs to help more minorities get into homeownership. This is not the way to do it."

I think it violates the entire discipline that these two companies have operated under. And it's going to end up costing some borrowers who are putting in 15, 20% down payments, who have credit scores in the seven hundreds and above more for their mortgage so they can help pay for those who are getting the discount," he warned.

I literally just got an email from an executive with a mortgage lending company. He goes, ‘So I guess we have to teach borrowers to worsen their credit before they apply for a mortgage in order to get the better price.’ I mean, that's a bit of an extreme, but yes, I totally recognize and appreciate the effort to bring more people into homeownership who have traditionally not had that opportunity. But using Fannie Mae and Freddie Mac for these sorts of political purposes may not be the best thing to do," Stevens said. 

@UNIMAN

 I already answered this one, those are public companies serving the public they are not the only game in town and there are many other mortgage brokers and banks that have fees and rates I think are awful and abusive to the borrower especially Wells and BofA and Citi, their fee structure their rates are always higher and I would never directly go through them.

Funny story, back in 2010 down here the market was swirling and we were looking for a property, I looked at MANY foreclosures from Fannie, they had a website that listed properties they were selling after foreclosure and their rates were not competitive at all but if you wanted their inventory you had to go with their products. I came close several times but ended up going conventional and not with them. The same is true today, if they are acting in a way you find abusive the best thing you can do is not work with them. They feel they are serving a need and are trying to be equitable and also bolster their balance sheet, that is their choice. All the blustering about how unfair etc I dont see borrowers picketing JP when they find out their rates stink and their fees are above normal, so this is nothing different. They are charging more than you think is fair, then let them learn from losing business, the purpose of whining on a message board is zero, it does nothing to change this liberal lefty Biden injustice.

So, by that logic you could eventually run off more and more of the low-risk buyers.  Thereby, having more and more of an imbalance of lower-rated buyers.  Then  if you follow that to its logical outcome, you have to allow even more poorly-rated buyers in and start charging more to what used to be lower-rated buyers because the great-rated buyers have 'searched and gone elsewhere'.

That is why the folks he quoted are people from both sides -- Democrats and Republicans and economists and financial guys that have no political slant.  There are no sensible people that support this for any reason other than the stated reason for doing it -- to allow lower-rated folks into houses they could not otherwise get into.

What kind of business model is that? 

Thats free markets Raiders...pure and simple.

The consumer votes for what they approve of by using a service or not.

I call it free markets...what do you call it?

@wallstreetcappers

 No sir.  It is not.  The business itself is being 'forced' by a political appointee that has no business experience into adjusting their business model purely for speculative 'political' or 'idealogical' reasons.

The free market part would be if everyone that could afford to, with a better credit rating would go elsewhere -- like you suggest.  Then they would have to go out of business OR attract back the better-rated folks -- that would be free-market.

Imposing new guidelines just to appease a poorly-rated group of folks while possibly deterring better-rated ones from your business for non-business reasons?  No sir, definitely not free-market.  

If you consider running folks away from your business AND forcing THEM to practice free-market by going elsewhere, sure.  This would be a 'forced' free-market on the individual in a sense.  BUT the business did not CHOOSE on their own to make the decision to possibly run off customers.

It is far from, say the BudLight situation, where the business itself made the decision to attract other customers, etc.

Even if it is not a strict free-market in a sense but a botched form of it -- so what?  

You have to see that it is badly thought out from a common sense perspective -- this is NOT political; BUT the decision to do it was political.  That is why so many of both parties agree it is a BAD idea from a financial perspective.

This is about bad business.  It is also unfair to the poorly-rated folks -- they are potentially being put in a financial hardship later down the road.

If it was such a great 'free-market' idea it would have been done before; and it would be supported by economists.

If you take politics out of this, you mean to tell me you cannot see how bad this could be for the markets in general and for lesser-rated individuals longterm?

Why would anyone think paying more when you have good credit is a good thing??  You get penalized fir doing the right thing?..how is that good?

@scooby-doos

 A good thing? When is paying more for anything irregardless of credit score a good thing? I get bugged even when I see a new car military discount or a college grad discount, different ways that dealers try to motivate people to purchase when I dont get the same opportunity.

Good thing we have options and opportunities, even when those evil disgusting Biden liberals try to wreck our lives we can still make choices and decide not to participate.

Dang its tough avoiding all the landmines that those horrible liberals put in the path of conservative righteous living.

@Raiders22

 I have addressed this like five times already...

You do not have to like what their fee structure is, I do not like BOFA and JPM and CITI and Wells how they fee gouge and offer extremely poor rates when market rates are better, they are not at all competitive. But they run their business as they see that they need to and I can use them, or not use them that is my choice. I can buy points I can sell points I can buy a house or I can lease one I can try seller financing or I can work three jobs so I can buy something faster. These are all choices, nobody is holding a gun to your head and forcing you to use Fannie, nobody is taking cash out of your pocket or any pocket unless you choose to use Fannie.

Why are you not mad at fees and rates that suck at other places, why is this political for you? As you mentioned if I take politics out of it...if I do that and I LIKE to do that, I make my decisions based on what is the best fee and rate scenario I can find...PERIOD. If it is Fannie then goodie, if it is not then goodie. I dont give a rats butt liberal this, Biden that, boo hoo those nasty credit grabbing liberals. I survey the landscape and make the best choice I can find from my efforts. These replies you make are so narrow focused on blame and your political biases...who cares. If it bugs you and gives you indigestion then make a liberals list and dont use those services.

Yo this conversation is awesome . Stimulating . Good work gentlemen . I do have one caveat though , can we please refrain from posting the sarcastic laughing/rolling faces at the end of monologues as it simply does not go with the tone of the current conversation , and in fact cheapens it , thus lessening it’s greatness and the overall punch that it delivers 

And for five times -- nobody is disputing that.  Sure, if you do not like it you can not do it.  That is not the issue to me at and any other financial person or economist.  The issue is they are NOT choosing to do this; they are being 'forced' to do it by a bureaucrat, not a business person.  This is NOT a business decision but an idealogical one.

The issue is NOT the individuals choice to use THIS particular vehicle.  The issue IS a business being forced to do something that NO SANE financial person sees as good.  This will very likely have bad financial repercussions on the markets and on the lower-rated borrowers in particular!

People going elsewhere is an ancillary effect of a bad financial decision done for idealogical reasons.  The result on the two sets of individuals and the results on the markets are three very, very different things.

Just because AN INDIVIDUAL can do something for their own best interest does NOT take away from the fact that this is a BAD decision done NOT for financial reasons or to correct a bad business model!

Again, unlike the BudLight issue, where they decided to do it on their own and have been trying now to amend that decision; in this instance THEY did not decide to do this -- they were TOLD to do it.

Budlight did not intentionally try to run customers off, but they could consider it; these lenders did NOT have the opportunity to consider what might happen to their potential customers.  Two very, very different decisions economically -- and that is what I consider, the longterm economic impacts.

"But using Fannie Mae and Freddie Mac for these sorts of political purposes may not be the best thing to do," Stevens said. 

                  Bottom line right there.^^^^^^

Pretty simple. Reward good behavior. ............so more tax dollars or deficit spending is not needed to bail them out again.