Exactly. These characters on BGOL have NO self awareness at most times lol.Sounding just like the cave man you claim to hate.
He didn't even realize that's the #1 excuse cacs use when we discuss reparations.
#pitiful
Joe Biden did what?... Can someone check this for legitimacy? This has to be some bullshit, right?
- Thread starter CoTtOnMoUf
- Start date
He didn't even realize that's the #1 excuse cacs use when we discuss reparations.
#pitiful
Sounding just like the cave man you claim to hate.
That’s what is most amusing about these BGOL Democrats. They’re basically conservatives themselves!
Biden Raises Costs for Homebuyers With Good Credit to Help Risky Borrowers
By Katherine Fung On 4/21/23 at 3:48 PM EDTHomebuyers with good credit scores will soon be facing higher mortgage fees as the Biden administration seeks to close the racial homeownership gap and get more first-time and low-income buyers through the door.
Starting in May, a new federal rule will upend the current structure of the Loan-Level Price Adjustment (LLPA) matrix. Homebuyers with a good credit score could see their monthly mortgage payment rise by over $60 a month, while riskier borrowers will get more favorable mortgage terms because their fees were reduced. It's a move the Federal Housing Finance Agency (FHFA) hopes will address housing affordability challenges in the U.S., but it's come under scrutiny for being unfair and potentially ineffective.
"In the short term, this may increase homeownership among the targeted group, but I'm afraid it could decrease homeownership among the middle class," Jerry Howard, CEO of the National Association of Home Builders, told Newsweek. "I'm not sure that we're not robbing Peter to pay Paul here."
Only about 25 percent of homebuyers with Federal Housing Administration loans are people of color, according to the White House. Black and Hispanic people, on average, have fewer savings to use as a down payment on a home and tend to have lower credit scores, according to David Stevens, former CEO of the Mortgage Bankers Association (MBA) and a former FHA commissioner during the Obama administration.
He told Newsweek that this can be attributed to factors like distrust in the banking system or being a first-generation American and that low credit scores can be a significant barrier to homeownership.
But in order for the FHFA to close the gap by bringing down LLPAs for those borrowers, the agency has to compensate for the reduction in borrowing fees by raising the LLPAs of borrowers with higher credit scores, who tend to be white. The average credit score in white communities was 727 in 2021, compared with 667 in Hispanic communities and 627 in Black communities, according to data analyzed by FinMasters, a personal finance blog.
A home for sale awaits prospective buyers on October 27, 2022, in Hollywood, Florida. Starting in May, homebuyers with a good credit score could see their monthly mortgage payment rise while riskier borrowers will get more favorable mortgage terms because their fees were reduced, under a new federal rule.Joe Raedle/Getty Images
The effort to get more low-income Americans and Americans of color into homeownership is essentially being subsidized by borrowers who have better credit scores and who can contribute more to their down payment, Michael Borodinsky, a vice president at Caliber Home Loans, told Newsweek.
Borodinsky said while the plan was designed to help people who have historically faced obstacles to homeownership, it comes at the cost of negatively affecting buyers who worked hard to save enough money for a larger down payment and maintain a strong credit rating, especially since those buyers can "be of all demographics."
"This new rule unfairly penalizes Americans for having good credit and rewards those who accrue debt and don't pay their bills with cheaper loans," GOP Representative Michael Lawler of New York told Newsweek. "The way to expand access to housing isn't to reward bad credit. It's to bring down inflation, reduce property taxes, cut energy costs and invest in critical infrastructure."
Although the new rule, which takes effect May 1, is designed to assist low-income and minority borrowers by encouraging homeownership, industry experts have expressed concern that the plan fails to meet that goal.
Stevens said that while the generational limitations on homeownership among racial groups in the U.S. need to be addressed, FHFA Director Sandra Thompson's actions weren't enough to lower borrowing costs to the point it will "make a difference."
"We just went through to this completely convoluted discipline around risk-based pricing in the hopes of accomplishing something that isn't going to be accomplished," he said.
However, in a statement shared with Newsweek, the FHFA defended the changes. It called the recalibration of its pricing framework "minimal" and stressed that the agency's goal of making sure that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac "fulfill their role in any market condition."
But former National Economic Council Director Larry Kudlow said those GSEs have never "penalized" people who don't need government programs to help them own homes, calling the Biden administration's new rule a "middle-class tax hike."
"We learned the hard way [in 2008] that if you can't afford a home, just getting a subsidy one time to get a mortgage, you won't be able to carry it," Kudlow told Fox News on Thursday.
A spokesperson for the National Association of Realtors (NAR) told Newsweek that a GSE could still incentivize homeowners without punishing others and stressed that such a move is "especially needed" at a time when there is limited affordable housing "in all areas of the market."
"NAR urges the FHFA to eliminate the fee increase on strong credit borrowers," the spokesperson said.
Newsweek reached out to the White House for comment via email.
The timing of the upcoming LLPA changes is also "not ideal," given the spring buying season and low inventory, an MBA spokesperson told Newsweek. But the MBA is more concerned about another mortgage change: The addition of an LLPA for loans with a debt-to-income (DTI) ratio greater than 40 percent, which Borodinsky stressed is often a "moving target."
The DTI is calculated by taking a person's monthly debts, including minimum payments on credit cards and loans, and dividing it by that individual's income. The result is used to assess a person's ability to make the necessary monthly payments on a loan.
In a March 15 statement, MBA President and CEO Bob Broeksmit warned that because the DTI often fluctuates throughout the mortgage application and underwriting process, the new fees will further vary those estimates, thus "increas[ing] compliance costs and confus[ing] borrowers."
"[It] makes for a 'no win situation,'" Borodinsky said. "Especially because the borrower will feel that they were taken advantage of by the lender due to these changed circumstances."
After the MBA asked the FHFA to remove the DTI adjustment, the agency delayed the DTI ratio-based fee to August 1. But the MBA expressed disappointment that the FHFA is not considering alternatives to the new fees, which "simply are not workable for lenders and borrowers alike."
Stevens agrees, saying, "This would just make things really difficult for the lending community and for potential homebuyers," Stevens agreed. He added that he's "hopeful" Thompson will gut the adjustment before it goes into effect during the summer.
Biden raises costs for homebuyers with good credit to help risky borrowers
The administration's new rule will reduce mortgage fees for riskier borrowers but will be subsidized by borrowers with higher credit scores.
www.newsweek.com
That's an extra $14,400 over the life of a 30 year mortgage.
Good point. I may have more to say if I were beginning a 30 year mortgage. Ironically enough, a new government policy allowed me to pay my house off 15 years early!
Look until folks show outrage for Trump's SALT deduction cap. I dont want to hear it
BRUH you are asking some good questions.
I need more relevant facts on this subject.
I am gonna have to do more research on the matter,
because I don't like the propaganda narrative of being
penalized for having good credit.
You have to understand CNN is government media so they will do all they can to make the democrats not look bad. So the author lets out the truth a couple of times but focuses the rest of the article on showing how someone with a lower credit score will pay more for the fees they are discussing. That’s not the point. The point is those with higher credit scores fees are increasing and those with lower scores are decreasing.
From the article:
“Broadly, the fees will go down for many with lower credit scores and will increase for many with higher credit scores.”
“For those with higher credit scores, more price tiers have been put in place, which in some cases may increases fees.”
The rest is CNN bullshit.
Fees on mortgages backed by Freddie Mac and Fannie Mae are set to change next month, in a plan designed to make homeownership more affordable for more people. Broadly, the fees will go down for many with lower credit scores and will increase for many with higher credit scores.
But that doesn’t mean people with lower credit scores will pay less than those with higher credit scores. The changes mean that people with higher credit scores will still pay less based on lower risk to the lenders, but having a lower credit score will now come with less of a penalty.
There are many variables that go into the cost of a home loan, including what kind of property you are buying, how much money you’re putting down and how high or low your credit score is.
5.5% may be a magic number for mortgage rates
These variables help lenders — and government-backed Freddie and Fannie, which buy the vast majority of loans from lenders — price loans for risk. After starting with the basic, or par, rate, additional price adjustments are added in order to account for how risky the loan is for lenders to make.
Pricing hits like this are called a loan level price adjustment, or LLPA, and have been around for a while and are occasionally updated. The price adjustments allow Freddie and Fannie to keep from being undercapitalized and over-exposed to risk. Fannie and Freddie, which guarantee roughly half of the country’s mortgages, do not directly issue mortgages to borrowers, but instead buy mortgages from lenders and repackage them for investors.
Changes to existing fee structure
Last year the Federal Housing Finance Agency, which oversees Freddie and Fannie, increased the fees on loans for which there is less reason for government support, including some high balance loans, vacation homes and investment properties.In October, the FHFA announced it would eliminate upfront fees for certain borrowers and affordable mortgage products, who tend to be borrowers with limited wealth or income, while putting in place increases to other fees, specifically for most cash-out refinance loans.
Then, in January, the FHFA announced additional updates to the fee structure for single-family homes that made permanent the eliminated fees and spelled out how other fees would be increased.
“These changes to upfront fees will strengthen the safety and soundness of the enterprises by enhancing their ability to improve their capital position over time,” Sandra L. Thompson, director of FHFA said at the time. “By locking in the upfront fee eliminations announced last October, FHFA is taking another step to ensure that the enterprises advance their mission of facilitating equitable and sustainable access to homeownership.”
How the fee change works
For those with lower credit scores, the fee changes will reduce the penalty for having a low score. For those with higher credit scores, more price tiers have been put in place, which in some cases may increases fees.For example, a buyer who made a 20% down payment with a credit score of 640 would see their fee drop 0.75% from 3% to 2.25% with the updates. Another buyer, also making a 20% down payment, who has a credit score of 740, would see their fee climb by 0.375%, from 0.5% to 0.875%.
The fee will still cost the home buyer with the lower credit score more.
New home sales rise for the fourth month in a row
A buyer with a 640 credit score and an 80% loan-to-value ratio will have a fee of 2.25%, while a buyer with a 740 score will have a fee of 0.875%. The difference in assessed fees is about $4,000 more for a buyer with a 640 credit score than for a buyer with a 740 credit score, based on a $300,000 mortgage.
The table outlining the fees based on loan to value ratio and credit score have been posted by Freddie Mac and Fannie Mae.
Some critics say well-qualified buyers are already struggling to enter the housing market.
“Between the lack of supply, interest rates more than doubling in the past year and pricing in most of the country remaining relatively flat, the barrier to entry has never been more difficult to pursue the American Dream,” said Pierre Debbas, managing partner at Romer Debbas, a real estate law firm.
“The intent of providing access to credit to lower-income borrowers with lower credit scores and down payments is an important initiative to help expand the demographic that can acquire a house and theoretically build wealth,” he said. “However, doing so at the expense of other consumers who are already struggling to enter the market is a mistake.”
But that criticism is misplaced, said Jim Parrott, a nonresident fellow at the Urban Institute and owner of Parrott Ryan Advisors, who added that it is “conflating two separate, largely unrelated moves on pricing for the government-sponsored enterprises.”
In a blog post, Parrott explains that the increase in fees for vacation homes and high-value loans allows Freddie and Fannie to reduce fees for some other buyers.
He also points out that the suggestion that fees are lower for those who make a smaller down payment misses a critical point. Any loan with less than a 20% down payment must have private mortgage insurance.
“So those who put down less than 20% pose less risk to the GSEs and should pay less in fees to the GSEs,” Parrott wrote.
Did you bother to actually read the article?
"The fury is over the way the government tweaked its mortgage-fees structure, and, indeed, prospective buyers should note that some people with higher credit scores could ultimately pay more, while some with lower credit scores could pay less. "
Yeah I read it.
Did you?
I see you conveintly didn't quote the next sentence...
"But other borrowers with high credit scores could also end up paying less—and will never pay more than the borrowers with lower scores."
So glad you read it. Now why should anyone with a higher credit score pay a higher fee? Under any circumstances?
Why is the Biden administration punishing financially responsible homeowners?
Not too long ago, we were told that if you worked hard and built good credit, you could soon put a down payment on a house and become a homeowner. Now, however, the Biden administration appears to be penalizing financially responsible Americans for their hard work.
In January 2023, the Federal Housing Finance Agency announced that two major government- sponsored entities, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), will be adjusting their single-family pricing framework, starting on May 1. This will change the fees known as loan-level price adjustments (LLPAs) and affect all future homebuyers ’ mortgage rates — right in the middle of the spring housing market and in the face of what many economists predict is a coming recession.
With the new fees, a homebuyer with a credit score of 680 or above will now have to pay a 1 percent LLPA fee. Those who make a 15 percent to 20 percent down payment will see the biggest increase — about $40 or more on their monthly mortgage payments.
In contrast, people with credit scores below 680 — riskier borrowers who are more likely to default on mortgage payments — would instead receive a 1.75 percent discounted LLPA fee.
Yes, you read that right: people who have a higher risk of default from a lender’s perspective will receive preferential treatment at the expense of those prospective buyers who are traditionally considered safer bets.
When this new policy was announced, the Biden administration claimed that it would make home ownership more affordable and thus strengthen the housing market. But this is nonsense. Homes will now instead become even more unattainable for hardworking and financially responsible Americans.
No less a figure than former Obama Federal Housing Administration Commissioner David Stevens told Fox Business, “This is an unprecedented move.” “This has really convoluted the entire discipline and credit risk pricing structure that Fannie Mae and Freddie Mac have followed since their inception,” he said.
Besides putting the burden on responsible homebuyers, this policy will make the housing market more dangerous. The cause of the 2008 housing market crash was a flood of borrowers with low credits attaining and then defaulting on subprime mortgages. This new policy once again encourages risky mortgages for buyers with bad credit.
The question most middle Americans are likely asking themselves is, why would the government do this? Is this a case of amnesia, or does the Biden administration’s Equity Agenda once again appear to override all other considerations?
As history tells us, government actions often fail to anticipate unintended consequences that hurt those very constituencies they claim to be helping. In this case, the potential for a cascading effect on middle-class homebuyers bidding for less expensive homes to offset this new cost may have the unintended effect of reducing the available inventory — and raising the prices — for those at the lowest end of the income scale. Has the Biden administration conducted a disparate impact analysis to assess how this policy will impact these communities? Has it studied what these changes will likely do to the housing market and U.S. economy? What favorite special interest groups are driving this policy?
The Biden administration has already tried to punish financially responsible Americans when it pushed forward its student loan forgiveness program. That would have shifted the burden of payment from borrowers to taxpayers, many of whom have already paid off their own student debts. Now, it’s seeking to introduce another scheme that would subsidize high-risk mortgages, essentially forcing the burden on to financially responsible Americans.
These are not the actions likely to result in either greater equity or increased prosperity.
Why is the Biden administration punishing financially responsible homeowners?
Yes, you read that right: people who have a higher risk of default from a lender’s perspective will receive preferential treatment at the expense of those prospective buyers who are traditionally c…
thehill.com
No one is being punished, if you have a 780 or higher credit score in all but one scenario, your LLPA will either be the same or go DOWN.
Keep in mind that without the government involvement in making homes affordable, buying a home would be like it was a hundred years ago when 1 in 10 Americans owned a home and home loans required a 50% down payment, 5 year terms, and a balloon payment at the end.
People who have low credit scores but are somehow able to afford a house under those terms are paying a fee so that everyone bitching about this can afford their first home.
Bottom line, if you were not financially able to buy your first home with 50% down paid in five years, you have no right to complain since others were charged a fee to help YOU buy a home.
OK, I see I thought this somehow applied to mortgages across the board, I didn't realize this was just within the FHA program. OK that makes sense now. Yeah it's all being subsidized. I thought somebody that didn't need FHA was paying some sort of penalty. That's what I was tripping on.
These changes apply to conventional loans, not FHA, USDA, or VA.
The FHFA (not FHA) has to charge fees for administrative costs and to guarantee loans for investors who buy mortgage backed securities in case the borrower defaults without mortgage insurance.
False. There are several scenarios where you will pay more based on credit score.
No there aren't.
80.01-85.00% LTV Range is the only one that increases for 780 and up.
Old
New
Negative is a fee increase, positive is a fee decrease.
No there aren't.
80.01-85.00% LTV Range is the only one that increases for 780 and up.
Old
New
Negative is a fee increase, positive is a fee decrease.
Can’t do an exact apples to apples since the old chart doesn’t have 780 or greater. But a credit score of 780 or greater would’ve been treated the same as a credit score of 740 or greater in the old chart. They added more credit ranges in the new chart. Here is what we have:
OLD Table: 740 or greater:
LTV 85.01-90% LLPA is .25%
NEW Table: 740-759
LTV 85.01-90% LLPA is .75%
So according to the charts, if you had a 740 credit score you paid .25% the old way. With the new way, if you have a 740 credit score you pay.75%
OLD Table
760-779 (which would be included in 740 & above)
LTV RANGE 85.01-90% LLPA is .25%
NEW Table
760-779 LTV RANGE 85.01-90% LLPA is .500%
Under the old chart, credit score of 760-779 would still pay .25%, with the new chart, they pay .500%
OLD Table (740 or greater)
80.01-.85% LLPA is .250%
NEW Table (740-759)
80.01-.85% LLPA is 1.000%
Under the old chart you’d pay .250%, with the new chart you pay 1.000%
So that’s multiple scenarios right there where you’re paying a higher LLPA when your credit score increases compared to the old way and I didn’t even count them all. A 740 credit score now pays more with the new changes across almost every LTV range compared to the old chart. They effectively raised the LLPA fees for credit scores 740 and above and created extra credit score ranges to do so. I don’t mind fees being reduced for everybody, but it seems backwards to charge some people higher fees based on a higher credit score.
1. A person with 780 is now being rewarded as a result of the change.
2. A person with 760 can always put less than 5% down to get the lower rate, close, add a large payment in the first 60 days, and request a recast.
They'll keep the lower rate while having their payments amortized as though they initially put down the larger amount. 720 and below can do this as well.
3. Someone with a 740 is a higher risk than someone with a 780. They were previously benefiting from being lumped in the same group with much lower risk people that have 850s. Now that it's separated, the risk calculation changes so the costs go up.
As a result of the changes, the total cost go up as your down payment goes down and as your score goes down.
More Americans Own Their Homes, but Black-White Homeownership Rate Gap is Biggest in a Decade, NAR Report Finds
People of color face major homebuying challenges, but Asian American rate reaches all-time high
March 2, 2023Media Contact:
Lauren Cozzi 202-383-1178
Fair Housing
Key Highlights
- While the U.S. homeownership rate increased to 65.5% in 2021, the rate among Black Americans lags significantly (44%), has only increased 0.4% in the last 10 years and is nearly 29 percentage points less than White Americans (72.7%), representing the largest Black-White homeownership rate gap in a decade.
- Asian and Hispanic Americans experienced the biggest homeownership rate gains over the last decade. Asian American households rose nearly 5 percentage points, driving the rate to an all-time high (62.8%). Hispanic American households increased by more than 4 percentage points to 50.6%.
- Black homeowners and renters are more cost-burdened than any other racial group. Less than 10% of Black renters can afford to buy the typical home.
The 2023 Snapshot of Race and Home Buying in Americaexamines homeownership trends and challenges by race and location to explain the current racial disparities in the housing market. Leveraging NAR’s latest Profile of Home Buyers and Sellers data, the report explores the characteristics of who purchases homes, why they purchase, what they purchase and the financial background of buyers by race.
Homeownership Trends
The report found there were about 9.2 million more homeowners in 2021 than a decade prior, but homeownership rates varied significantly by race. The Black American homeownership rate – 44% – increased less than half of 1 percentage point (43.6% in 2011) and continues to lag well behind Hispanic Americans (50.6%), Asian Americans (62.8%) and White Americans (72.7%). Consequently, the homeownership gap between Black Americans and any other racial group has grown, especially when compared to White households (29%), representing the largest homeownership gap in 10 years (26% in 2011).Conversely, Asian Americans (5 percentage points) and Hispanic Americans (4 percentage points) experienced the biggest homeownership rate gains over the last decade. The Asian American homeownership rate of 62.8% is an all-time high. White American homeownership grew by nearly 3 percentage points and has been consistently around 70% since 2017.
“Unfortunately, the incredible affordability challenges of the last year have hit minority home buyers more than White buyers,” said Jessica Lautz, NAR deputy chief economist and vice president of research. “Black buyers are more likely to be first-time buyers, who are more sensitive to changes in mortgage interest rates, while White buyers are more likely to have housing equity to rely on as they make a housing trade.”
Racial Inequalities in Housing Affordability
Black homeowners spend more of their income to own their homes than all racial groups, with 30% being cost-burdened – defined as spending more than 30% of their income on housing. That’s followed by Hispanic Americans (28%), Asian Americans (26%) and White Americans (21%).More than half of Black renter households (54%) spend more than 30% of their income on rent, the most of any racial group. About 30% of Black renters are severely cost-burdened – defined as spending more than 50% of their income on rent – representing nearly 2.5 million households. By contrast, 22% of White renters are severely cost-burdened, representing 5.1 million households.
After comparing the qualifying income to purchase the typical home with the median income of renter households, NAR estimates that while 17% of White renters can afford to buy the median-priced home, only 9% of Black renters can nationwide.
“Even among successful home buyers, Black Americans have lower household incomes, which narrows the available pool of inventory they may be able to afford and makes their journey into homeownership even more difficult in this limited housing inventory environment,” Lautz added.
Racial Disparities in the Mortgage Market
Beyond affordability, Black and Hispanic home buyers also face extra challenges in getting a mortgage. Black Americans have the highest denial rates for purchase and refinance loans. According to Home Mortgage Disclosure Act data, 20% of Black and 15% of Hispanic loan applicants were denied mortgages, compared with about 11% of White and 10% of Asian applicants. Further, denial rates for Black Americans are even higher for home improvement loans. Black Americans were denied applications for nearly 17% of loans for a home purchase, 17% of loans for refinancing and 51% of loans for home improvement.Homebuyer Demographics by Race/Ethnicity
Using data from its latest Profile of Home Buyers and Sellers report, NAR analyzed the characteristics of recent home buyers, their reasons for purchasing, the steps they took in the homebuying process, and the ways buyers financed their home purchase based on race. Among all home buyers, White Americans made up the largest share (88%), followed by Hispanic Americans (8%), Black Americans (3%), Asian Americans (2%) and other (3%).For down payments, Black Americans drew down 401(k)/pension funds more than any other group (16%), which increased 2 percentage points from last year (14%). Asian Americans received gifts (22%) and loans (7%) from a relative or friend more than all other racial groups.
Hispanic Americans had the largest share of student loan debt (46%), followed by Black Americans (33%), White Americans (17%) and Asian Americans (13%).
Discrimination in Transactions
In addition to being asked about their recent homebuying experience, home buyers were asked if they had experienced or witnessed discrimination during their real estate transaction. Half of Hispanic American home buyers said they experienced steering toward or away from specific neighborhoods, followed by 29% of White, 12% of Black and less than 1% of Asian American home buyers. Forty-six percent of Hispanic American home buyers experienced discrimination by the refusal of a homeowner or agent to show property, followed by 24% of Black, 15% of White and less than 1% of Asian Americans. Thirty-nine percent of Black American home buyers reported discrimination through home appraisal, followed by 17% of Asian, 9% of White and less than 1% of Hispanic Americans.NAR Advocacy
NAR works to ensure Realtors® are active leaders in the fight to close racial homeownership gaps. NAR co-chairs the steering committee for the Black Homeownership Collaborative(link is external), which has outlined a seven-point plan to create 3 million net new black homeowners by 2030. NAR has also enhanced the real estate industry’s efforts to end housing bias. Its “ACT!” fair housing plan, launched in 2019, emphasizes “Accountability, Culture Change and Training” to advance fair housing in the industry. NAR’s interactive training platform, Fairhaven, puts real estate professionals in simulated situations where discrimination in a real estate transaction can occur. Also, the association’s implicit bias video and classroom trainings offer strategies to help Realtors® provide equal professional service to every customer or client.To increase the nation’s housing inventory, NAR advocates that all levels of government: support the construction of housing that is affordable to the typical consumer; preserve, expand and create tax incentives to renovate distressed properties and convert unused commercial space to residential units; and encourage and incentivize zoning reform. Expanding new-home construction by an additional 550,000 units a year for 10 years would create 2.8 million new jobs and generate more than $400 billion in economic activity. NAR and the Rosen Consulting Group’s Housing is Critical Infrastructure: Social and Economic Benefits of Building More Housing report examines the causes of America’s housing shortage and provides a range of actions that can effectively address this long-time problem.
View NAR’s 2023 Snapshot of Race and Home Buying in America at nar.realtor/research-and-statistics/research-reports/a-snapshot-of-race-and-home-buying-in-america.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries. The term Realtor® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics.
Here's What the New Fee Structure Would Look Like, Per FHFA
The GOP senators' letter came a day after FHFA's Thompson issued a statement citing "a fundamental misunderstanding about the fees charged by the [Fannie Mae and Freddie Mac] Enterprises, and why they were updated."In that statement, Thompson sought to "address some of these misconceptions directly." Here are the main issues she pointed out:
Thompson noted that fees would increase for buyers in some categories and decrease for those in others, but that "[t]he updated fees, as was true of the prior fees, generally increase as credit scores decrease for any given level of down payment." We looked into some test cases.
For example, those borrowers in the credit score range of 720-739 who plan to make a down payment of 20% on the home value would see a fee increase from 0.750% (under the old structure) to 1.250% (under the new plan effective starting May 1, 2023). So, a borrower in that credit score range making a down payment of $80,000 (20%) on a home value of $400,000 would now have to pay an upfront fee of $4,000 (1.25%) on the loan of $320,000 (80%). Under the old plan, that fee would have been $2,400 (0.75%).
But some buyers with higher credit scores, depending on other factors, would see a decrease in upfront fees. For instance, borrowers who have a credit score of 780 or above and who plan to make a down payment of 20% on a home's value would see their upfront fees reduced from 0.500% under the old plan to 0.375% under the new one. So, a borrower in the highest credit score category making a down payment of $80,000 (20%) on a home value of $400,000 would now have to pay an upfront fee of $1,200 (0.375%) on the loan of $320,000 (80%). Under the old plan, that fee would be $1,600 (0.500%).
Additionally, the new plan makes it easier for those with a poorer credit score (639 or below) to buy homes, even with a down payment of 5% or lower. The new fee for buyers in that category is 1.750%, down from 3.250%. The new upfront fee for such buyers is still the highest one when compared with borrowers with better credit scores but their fee would be lower than fee that the borrowers who make a down payment between 5% and 30%.
Additionally, the new plan makes it easier for those with a poorer credit score (639 or below) to buy homes, even with a down payment of 5% or lower. The new fees for buyers in that category is 1.750%, down from 3.250%. However, despite the new plan making it easier for borrowers with scores in that range to get a loan, they still end up paying higher upfront fees than those borrowers making a similar down payment but with higher credit scores.
This example from CNN's Anna Bahney, who covers investments and real estate, illustrates that point:
See Fannie Mae's Loan-Level Price Adjustment Matrix for a breakdown of real-world pricing scenarios across a range of credit scores and other factors.
This is how rabid and savage the republican base is. She is listing great things that are helping people AS NEGATIVES!! If I told someone I went to an amazing party with top shelf liquor, wagyu steak dinner, and I had a threesome with two women I met there...there is not one person that would say the party sounds awful. The only anger I'd encounter is someone asking "where the fuck was the phone call or text?".
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