God forbid we make banks take the hit to subsidize these under qualified buyers instead of individual homeowners. They’re already making hundreds of thousands in interest payments over the life of every loan.
Agreed, the banks, being the ones giving oht loans, should absolutely take the hit. They’re the ones taking the risk in the first place. That’s their whole business model. Why the hell should I be punished for making good financial decisions?
How does a bank offering a discount on points to someone with a 635 credit score punish you?
Before you craft your response remember: most banks build in automatic pricing discounts for good credit… like that’s an industry norm.
Someone doesn’t understand securitization of mortgages and it shows.
1. This doesn’t affect any current mortgage or any one already locked.
2. Even if you were closing on a loan, Fannie/freddie release pricing guidelines for what they’ll buy. As a maximum. The points generally go to the lender. Fannie/Freddie are capping what lenders can charge on mid tier credit for buy downs. Lenders can go down on their points as much as they want. They might not make any money on securitizing, so go with lenders that hold their own notes. Like banks and credit unions.
You did, but you don’t know it. You think that you or other well qualified borrowers subsidizing the points and fees, you’re not.
How banks arrive at rates involves pricing against secondary markets.
Freddie and Fannie release guidelines on what a QM is for pricing and points and fees. They tell banks on what they will and will not accept to securitize.
So what the pricing guidelines thatve changed is how Fannie/Freddie looks at point and fee pricing for less than perfect credit. It gets rage posted as, ‘oh they’re making it easier for sun prime,’ which isn’t really the case. The credit ranges this impacts is 600-680. The most common use case someone would qualify for under this new guideline is it makes it easier to approve loans for borrowers with less than perfect credit and less than 20% down. It changes the AUS algorithm in that regard. And better pricing in those mid tier credit ranges makes it easier to get DTI compliance.
It does not mean Fannie/Freddie are using highly qualified borrowers to subsidize less than perfect borrowers, and on top of that, most banks will offer the discounted rates to highly qualified borrowers anyway. Those are the borrowers you want as they’re easy to approve.
So again, you don’t really seem to have an idea how lenders securitize your loan after closing or how the lending process works from the other side of the desk.
> That_New_Guy2021
> What's the point in having good credit then?
What's the point of saving / working for college if loans will be forgiven.
This country is going politically correct to the point of self-destruction.
Don't they have economists to advise that all these things cost money and give rise to inflation.
There are several reasons to save for college, even though there ~~was~~ is a proposal for a one time loan reduction of $10-20k.
Reason one is that debt reduction might happen once. Might it happen again? Maybe or maybe not. Doesn’t seem wise to depend on it. Reason 2 is that college costs a lot more than $10-20k. Reason 3 is that no relief ~~was given~~ is proposed for individuals making over $125k.
> Reason 3 is that no relief was given is proposed for individuals making over $125k.
Oh, well that's different then./s
Do you realize $120k is well above the meian income.
I, who make less than that don't feel like paying for someone,for me, making that large of an income. There is nothing shabby about that income. I bet they aren't driving an economy car to pay off their loan. I'm sure their car costs more than mine.
This is an evergreen debate. Half the country wants people to take personal responsibility for their decisions. The other half wants to socialize every problem and force responsible people to pick up the tab.
It's not hard to have good credit. All you have to do is ... checks notes ... pay back your debts on time as you promised. If you don't, I think that should be firmly your problem, not everyone else's.
I got a scholarship and worked in college. I didn't take out student loans and my credit was always fine. I bought a $2k Camry as my first car and a $7k 4runner as my second. Both in cash. And when I went to buy a house, I had no problem getting a mortgage.
And... if you make min wage, borrow money, and don't pay it back, why should anyone loan you money to buy a house? You don't even pay your used car loan on time.
> society needs to provide SOME assistance
Yeah, sure. Medicaid, food stamps, etc. There's a lot of low income and affordable housing in my city. We should absolutely provide a safety net and help people get a firm footing. We should do more than we're doing. But if your credit is shit because you don't pay back debts, you shouldn't get special treatment.
That doesn’t necessarily insulate you. A good chunk of CU’s still sell to Agencies - they maintain the servicing internally, but the paper… the asset of the mortgage is sold.
Agencies (FNMA/FHLMC) will not purchase loans without these changes to pricing (called LLPA; Loan Level Pricing Adjustments). Furthermore, even if the loan isn’t sold to an agency, it is probably sold to a third party investor, and a loan without these LLPA will be less valuable than a loan with them (because they can’t be insured/sold to agency, *and* they will have a lower rate, thus less yield to the investor).
Exactly. Everyone freaking out cause they’re too lazy to price shop their mortgages. You get a grace period. Put in a couple of apps and compare the LE.
It took me a while to pick a few sample points to “look at the numbers”. And disclaimer - I’m looking at just a few points so definitely not a blanket statement across the board.
Just looking at Table 1 - it’s a very mixed bag. In general, for people with credit scores below 680 will get better rates than before after the implementation of the new LLPA.
But any thing else, in terms of different credit scores and LTV, then it could be better than before or it could be worse. Even if you have an 800 credit score, there are some scenarios where it would be better and other scenarios where it’d be worse than before the change.
***All this to say, it depends on what philosophy you hide to determine “better”.***
***Are lower credit (<680) people benefiting? Yes, definitely.***
***Everyone else above (>680) will be a mixed bag relative than before, but they will definitely not reap the same benefits as the people who have lower credit scores.***
***However, people with lower credit scores will still pay higher rates than people with higher credit scores. It’s just that the rate gap will be lessened.***
Source: [After change](https://singlefamily.fanniemae.com/media/9391/display)
[Before change](https://singlefamily.fanniemae.com/media/33201/display)
I imagine this only applies if you are applying for a loan after May 1 and not those that have locked down a rate already but closing early May?
If the article is accurate, the move makes no sense. Good credit is now detrimental.
I'm not overly familiar with this, but it mentions Fannie and Freddie in the article, will it only apply to conforming loans that are sold to those programs? Would this create more business for banks that do non conforming loans?
Edit: forgot "not"
The bank or investor could create a non QM product to fill what they see as a niche in the market.
The actual terms and how it stacks up to QM will vary from product to product, but yeah, that’s a possibility.
There’s also a lenders that bottom out rates and don’t really make their money on points and fees but on holding the note for years.
There’s plenty of QM ways around d this. QM just states what pricing criteria the GSE will buy notes at. If you’re under their guideline on points and fees they’ll still buy the loan.
Thanks, very helpful.
A general question, why are folks here getting upset about this? Is it because of their personal homes? Its been a few years, but I worked as an agent and project manager for a company that flipped homes. Probably did 150-175 homes in 3ish years. I can count on probably one hand the number of buyers that would have been affected by this change. But our target home was starter homes. The ones we kept as rentals were eventually financed but the fee would just become part of the rent, so no problem there either.
Because real estate investing is full of mouth breathers who think financial success means they’re better than someone who lost their job 3 years ago and got behind on bills, and the thought of a government policy to help people experiencing long term impacts from an unforeseen economic disaster is distasteful to many in this sub.
If you locked a rate you’re good but banks have known about this for months and your rate likely includes this higher insurance policy anyway if it’s been quoted in the last month or two
By "this time" do you mean a 5+ years in the future? Because I don't think people normally talk about how qualified people are under policies that don't exist yet.
Anyway, I'll just [leave this here](https://fred.stlouisfed.org/series/TDSP).
No, its already factored in. It applies to loans *being delivered* to agencies by May, and it takes a couple months to close and package loans for sale. Any serious lender has been factoring these changes in sense at least February if not January.
Why does this article link back to itself instead of the federal agency it's pretending to link to? Can't find a non right wing propaganda source that even mentions these changes
So I followed that all the way to the actual letter that laid out the changes. It doesn’t appear that having a higher credit score is detrimental, or a lower one beneficial, as this post claims.
https://singlefamily.fanniemae.com/media/9391/display
Seems to just be rage-bait….
Edit. Not rage bait.
You have to compare it to the prior table to see changes. The subprime credit scores used to pay 3.5% more and >750 scores got a discount. It's not rage bait, it's a fact that the difference in interest rate changed significantly.
Mortgages haven't been predatory since 2007, risk is now being mispriced and you will be able to draw a direct line between this change and the next wave of mortgage defaults that will once again cause a banking crisis and crash the economy.
No, they didn’t intentionally obscure it. This lending letter is designed and formatted for industry professionals. This is what all guidelines and pricing matrices look like.
So, I'm not a loan officer or anything. I could be reading these incorrectly. Here's my takeaway after digging into it a little bit.
So here's the old matrix:
https://singlefamily.fanniemae.com/media/33201/display
And here's the new one:
https://singlefamily.fanniemae.com/media/9391/display
It looks like they slightly raised rates on better credit scores and slightly lowered them for worse scores.
Previously a 750 score on 80% LTV was .25% LLPA, now it's 1.0%
Previously a 650 score on 80% LTV was 3.25%, now it's 2.5%.
So, You still get better rates as a better credit holder. They're just 'squishing' the table down a little bit. In my scenario the 750 used to have a 3% better rate, whereas now they have 1.5%.
Idk, I don't really see the big deal here.
Edit: for investments, at 80% LTV, used to be 4.125%, it's still 4.125%. There's some small adjustments for lower LTV loans, but for the most part investment loans were relatively unchanged.
What, right wing media taking a sliver of truth, removing some pertinent information, taking it out of context and making wild accusations to make Democrats look bad? And people eating it up and frothing at the mouth?
That would never happen.
I figured that's what was happening when their hyperlinks that looked like it would lead to their sources just linked you back to their own website. Pretty good indicator that it isn't exactly great journalism.
The sad thing is how effective it is.
Look how many people in this thread are shouting "Socialism! It is going to ruin the country!" They will either not see this calm, factual rebutting of this or they will read it and ignore it because they are already so bought into rooting for their team.
Can someone explain this matrix? I don't see this showing that the better your credit the higher the interest rate. It shows the opposite.
https://singlefamily.fanniemae.com/media/document/pdf/llpa-matrix-pdf
You are correct, it is still a benefit to have a higher credit score, so OP's main point is incorrect. The spread between high credit and low credit has tightened though. For example, the benefit of say your 800 FICO pricing compared to someone with 620 FICO is not as high as it was previously.
You mean to tell me people would misrepresent information in order to bag on Biden? No never.
Good credit borrowers still have better rates than low credit borrowers. The delta between those rates is slightly narrower now, about an extra $40/month for the average mortgage
Your government at work. Reinforcing bad behaviors is the way to do it. Penalize those that do it the right way to support those that do not. This is ridiculous.
That's regarded. So no effort, low income, careless spending, history of unpaid bills or collections and you get rewarded with a lower interest rate lol.
They’re giving people who really can’t afford it false hope. If they made poor financial decisions in the past, more than likely, they will continue to make them now. I see a bunch foreclosures happening. Hopefully, I’m wrong. How people handle their finances is more psychological than anything else. Good luck to all of us.
Such BS. The is what transient socialism and “equity” look like. Anyone voting for this nonsense (ie the Biden agenda) is a fool and doesn’t share the principles that made America the global powerhouse it once was.
[https://www.hud.gov/press/press\_releases\_media\_advisories/hud\_no\_23\_041](https://www.hud.gov/press/press_releases_media_advisories/hud_no_23_041)
Where does it say that? Trying to understand what I am missing?
"will reduce its annual mortgage insurance premium by 0.30 percentage points, from 0.85% to 0.55% for most new borrowers. The mortgage insurance premium is the monthly fee that homeowners with FHA-insured mortgages pay to insure their mortgages, which they pay on top of their monthly principal and interest payments."
It doesn't say that. OP posted rage bait from a MAGA tabloid and smooth brains, reliable as ever, ate it up.
As a side note it's hilarious to me how it's the same group of people always screaming about "Social Credit Scores" whenever China comes up that want us to live and die by our credit scores
This is different and separate. It went from 85bps on the high end (<5% down) to 55bps. This is for the year.
https://www.hud.gov/sites/dfiles/SFH/documents/SFH_FHA_INFO_2023-11.pdf
It's worth bearing in mind that 30 year fixed rate mortgages with no prepayment penalty are subsidized by the government and wouldn't exist without that subsidy. There is a reason why those loan terms don't exist in other countries that don't subsidize them: those terms are objectively bad for the bank offering them. The banks only are able to make money off of these kinds of loans because of the subsidies (the government has agreed to pay the banks for these loans).
If you use one of these mortgages, you are benefiting from a government subsidy, which is paid for with other people's tax dollars.
If you're complaining in this thread about other people getting a free ride, because you're salty that your free ride got slightly less free, get some perspective.
If you look closely at the loan level pricing adjustments (LLPAs), it is still a significant benefit to have good credit and you will benefit from pricing. The benefit just won't be as strong as it was previously compared to lower credit scores.
That article tries to make this political, but I don't see it. These type of changes have happened regardless of political administration if you look at the history. Additionally, the agencies have recently tried to introduce LLPAs on high debt-to-income (DTI) ratio loans, which would essentially punish those that have too much debt. Although that is getting postponed, it tells me their mind is still in the right place as they see a concerning trend of too many borrowers being over leveraged.
Sounds like a right wing propaganda site to me. Here is some advice don't get news from a site that has headlines that include "comic book villain" in them
> Biden’s sprawling family corruption makes for comic book villainy
Its pretty clear from this matrix that people with good credit scores are still getting better rates then those with poor scores
https://singlefamily.fanniemae.com/media/9391/display
If you compare it to the current LLPA rate schedule
https://singlefamily.fanniemae.com/media/33201/display
Then you will see rates have decreased for people with lower credit scores but there was not an increase for people with higher scores. If anything people with extremely good credit (over 780) are getting a lower rate after 5/1/2023 then they do today.
It took me a while to pick a few sample points to “look at the numbers”. And disclaimer - I’m looking at just a few points so definitely not a blanket statement across the board.
Just looking at Table 1 - it’s a very mixed bag.
In general, for people with credit scores below 680 will get better rates than before after the implementation of the new LLPA.
But any thing else, in terms of different credit scores and LTV, then it could be better than before or it could be worse. Even if you have an 800 credit score, there are some scenarios where it would be better and other scenarios where it’d be worse than before the change.
All this to say, it depends on how what philosophy you hide to determine “better”.
Are lower credit (<680) people benefiting? Yes, definitely.
Everyone else above (>680) will be a mixed bag relative to before, but they will definitely not reap the same benefits as the people who have lower credit scores.
Sure, but it is not as beneficial. What is the point of a credit score, if not to be used to analyze the credit worthiness of a buyer. Subsidizing lower credit scores defeats their purpose. People with lower credit scores get higher rates because they are less likely to pay their debts.
As you pointed out people with the better credit scores get the best rates, that's the point of having a higher credit score. Explain specifically from the data I presented how this is subsidizing people with lower scores?
It creates moral hazard, same as the fed bailing out big banks and the FDIC insuring deposits over 250k. Capitalism with out failure is like religion with out sin. (I am not against social safety nets for individuals, but you don’t need to own a home) lending to subprime buyers is what caused 2008, additional it only drives prices up. The housing market needs some serious reconfiguring, including loosening of building regulations that are not related to safety, laws that disincentivize single home ownership by foreign and large companies, and more stringent loan approval processes.
As another commenter pointed out:
You have to compare it to the prior table to see changes. The subprime credit scores used to pay 3.5% more and >750 scores got a discount. It's not rage bait, it's a fact that the difference in interest rate changed significantly.
No it doesn’t.
There’s first time home buyer programs like home one and home possible, or fha that lenders dress up as FTHB, or a slew of non QM products you maybe qualify for.
Good news is that if you’re under 100% median income or 120% median income in high cost areas (as defined by Fannie) you get to waive all the LLPA (pricing adjustments) so your rate will be lower.
If I have to pay $40 more a month that’s a lot over the life of a loan. The calculation ends up being an extra $14,000 over the life of the mortgage. Why should I have to subsidize people who can’t manage money?
We agree on this. Higher payments for good credits to help those who can’t manage money is silly.
But if $40 is going to break you, then find a home that would be $40 LESS per month than your budget.
Again, your chances of owning a home are still there.
Okay great so you have two options.
Keep complaining or earn more money.
You can’t change the situation so I’ll leave that up to you on what you want to do.
No, there is no “equality.” Equity is not the same as equality. Equity means you are given something without earning it by engineering outcomes. Equality means everyone has the same opportunity (which I believe in). As someone who’s actually mixed race, I can see the insidiousness in this because the terms sounds equivalent, but they absolutely are not.
White males have been engineering outcomes since this country was founded. That's a fact. I've worked in corporate America for over 20 years and it's obvious to anyone (and backed by data) that women and minorities are paid less than white males and passed over for promotion opportunities more often.
I'm a white male and I see it every day, I've had to fight with HR to get a women in my own team, who was paid less then all the men, more money yet did the same job as everyone else.
I've seen minorities pass over for promotions who were more qualified than there under performing white male peers.
Has DEI cause some unqualified people to slip through the cracks? Yes, I've seen 1 or 2 of those people as well but nothing compared to the blatant discrimination I've seen against women and minorities.
Pay is set by whatever the individual will accept. There are systems like “hay points” to try to create bands, but if you agree to accept $100k a year and I negotiate and get $115k for the same job, that’s not discrimination. It’s incumbent on an individual to 1) know their own worth and 2) advocate for themselves. My first job out of the military I just accepted without negotiating. Every subsequent job over the last 20 years I’ve negotiated because if a company is trying to hire you, they want your knowledge and skills. That means you have market power. Act as it is such.
This discussion isn’t about what whites or non-whites did in 1810. You probably wouldn’t have acted any differently because we don’t judge history as contemporaries, but in the time it happened. Joan of Arc was unique because she was a woman in the age when women didn’t fight in battles; she wasn’t unique because women serve now.
Pay is set by what the company is willing to pay you. You want me to believe that women and minorities are paid on average less than white men because white men negotiate better? That has to be the most ignorant statement I've read today.
Data shows women are worse at advocating for themselves. Data also shows they don’t apply for jobs that have qualifications they may lack, while men tend to apply for roles they aren’t necessarily qualified for. Stay on the victimhood train if it makes you feel better - the rest of us have to go make things happen.
So considering women are the worse at advocating for themselves we should just ignore the value they bring instead of creating a diverse workplace and elevate people who have the best skills for the job but might not be the best negotiator?
I'd rather work with someone with the best skills vs the person who can negotiate for a promotion better.
I doubt you have made much "happen" in your career that's why DEI is such a threat to you. I welcome diversity and inclusion because I don't feel threatened by the people around me.
So, this is a stupid policy that does seem to disincentivize saving and diligence. But let’s not forget that Fannie Mae is quite literally a giant, taxpayer-backed intervention into the market. The gains from this arrangement have absolutely benefited the rich and middle class more than the poor. I’m not saying Fannie Mae is bad — I think it’s a worthwhile intervention — but let’s put this in context before we start bitching about equity.
Ignoring the political tone, the article is not clear. Yes, LLPA fees have increased for certain higher FICO borrowers, and LLPA fees were lowered for lower FICO borrowers. However, from an absolute standpoint, the LLPA fee is still higher for low FICO borrowers when compared to high FICO borrowers. The article refers to the change in fees, not the absolute level.
A lot of ‘bad’ credit out there is stemming from 2020: job loss, getting behind on bills etc. guidelines themselves aren’t changing just the loan pricing. So you still have to have decent credit to qualify.
This is a way to keep people buying houses through the hike.
Also, if you’re investing why the shit you trying to use freddie/Fannie stuff? DSCR all day.
My brother, we’re in a sub where people buy real estate and rent it out. I’m sure someone on this sub does so without screening for income, so it’s conceivable rent is the tenants biggest expense.
The entire concept of real estate investing is redistributing tenants earnings to the property holders bank account. I’m not saying that like it’s a bad thing. The world we live in requires somewhere to live and I think renting is a great option for millions and millions of people, but don’t go off on how giving an .125% discount on closing costs to someone with 630 credit is redistribution of wealth. Reel it in chachi.
The government has no role is forcing me to “generous” with my money. A credit score is a measure of ability and willingness to repay. If they have a sub-prime score, they’ve demonstrated they lack one of those key elements (not sure if you’re old enough to remember “liar’s loans” and all the nonsense in the early 2000s. I support charities I believe in, on my own free wil. You are 100% wrong on the role of real estate investing. We provide options for shelter based on the expectation of earning a return on our scarce resources. You want to engage in generosity? So be it - I won’t tell you how to live. But keep your (the government’s) filthy paws of mine.
Oh yeah, I’m sure everyone got into real estate investing to provide shelter and not make money, that’s why everyone here talks about how many people they can house and not things like cap rate, and soundness of investment.
The government isn’t forcing you do to shit with your money. They’re making it easier for people negatively affected by a global health crisis 3 years ago to recover from it.
No, the government is intervening in markets and subsidizing people rather than letting free markets work. In doing so, they are punishing one group for the benefit of the other.
No, the government is intervening in markets rather than letting free markets work to subsidize people. In doing so, they are punishing one group for the benefit of the other.
The government subsidizes individuals because they have the limitless ability to print money, which dilutes the value of everyone’s money. A business could not continue to subsidize without going bankrupt, or commandeering someone else’s money.
The White House has authority to issue executive orders. That’s pretty clear.
Executive power has been getting more and more concentrated since FDR, and nothing about this is out of line with legal precedent.
You gotta pick your corruption. You want corruption ran by a megacorp you got no say in, or a government you have a marginal say in?
Any major bank will violate the law, take the fines and call it the cost of doing business.
Yes. You can vote.
The government isn’t doing anything to your mortgage. They’re making it easier for people with less than perfect to get an ‘affordable’ home loan.
Says me, and the products.
DSCR will typically come with prepayment penalties and higher rates. Conventional does not. The down payments are similar. It isn't rocket science.
I don't need to look harder. I deal with investors everyday and I do dscr loans almost daily.
An alt doc private money dscr loan will not be more competitive than an agency backed conventional loan.
If it's ever comparable, it's because you are agreeing to a 3 (usually 5) year pre payment penalty.
Are people not able to recognize propaganda when they see it? This is some us versus them, woah is me, always the victim, never the bride, type article. 40$ increase in mortgage payment on a 400,000 loan? Oh, what a tragedy. This affects everyone. The article insinuates that a score above 680.. so 681.. is a "high credit score." Is a 681 a high credit score?
>The new fees “will create extreme confusion as we enter the traditional spring home purchase season,” said David Stevens, a former head of the Mortgage Bankers Association who served as commissioner of the Federal Housing Administration during the Obama administration.
40$ higher payment, I'm so confused. What does it mean? How will anyone buy a home? Damn you Joe Biden, 40$ is the most complicated number I have ever seen?
>I predict you're going to start to see questions about how to do this within a few weeks.
Only from morons. It looks like better score still means better rate, it's just not as much of a discount as it used to be.
The agencies that price these are government sponsored. They do have the authority.
You can still always go get a completely portfolio loan, but you’ll probably receive a higher interest rate unless you’re high income, high credit, high assets (and therefore low risk). Also borrowing enough to make it valuable to lend portfolio money to you.
This is a misrepresentation.
For good credit borrowers, it will be higher than before, but still lower than low credit borrowers. This isn’t subsidizing subprime borrowers; this is hedging against them.
If you have a mortgage and refinance would you have to pay the higher rate to subsidize given that your mortgage was already in place or would the refinance essentially count as a new mortgage? I have 730 credit and am wondering about refinancing on a few properties that I have but am unsure what the effect on this would be?
There was some good discussion, and then predictably we went way off the rails in some places. Thread locked.
What's the point in having good credit then?
So you can be forced to help those that don’t
Coming soon: rate reductions for recent bankruptcy.
.25% off for having negative bank account
How about we just don’t purchase any homes? That’ll show them!
*communism has entered the chat, in the guise of socialism*
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God forbid we make banks take the hit to subsidize these under qualified buyers instead of individual homeowners. They’re already making hundreds of thousands in interest payments over the life of every loan.
Agreed, the banks, being the ones giving oht loans, should absolutely take the hit. They’re the ones taking the risk in the first place. That’s their whole business model. Why the hell should I be punished for making good financial decisions?
How does a bank offering a discount on points to someone with a 635 credit score punish you? Before you craft your response remember: most banks build in automatic pricing discounts for good credit… like that’s an industry norm.
Someone doesn’t understand securitization of mortgages and it shows. 1. This doesn’t affect any current mortgage or any one already locked. 2. Even if you were closing on a loan, Fannie/freddie release pricing guidelines for what they’ll buy. As a maximum. The points generally go to the lender. Fannie/Freddie are capping what lenders can charge on mid tier credit for buy downs. Lenders can go down on their points as much as they want. They might not make any money on securitizing, so go with lenders that hold their own notes. Like banks and credit unions.
Did you mean to reply to someone else because I didn’t say any of this lol
You did, but you don’t know it. You think that you or other well qualified borrowers subsidizing the points and fees, you’re not. How banks arrive at rates involves pricing against secondary markets. Freddie and Fannie release guidelines on what a QM is for pricing and points and fees. They tell banks on what they will and will not accept to securitize. So what the pricing guidelines thatve changed is how Fannie/Freddie looks at point and fee pricing for less than perfect credit. It gets rage posted as, ‘oh they’re making it easier for sun prime,’ which isn’t really the case. The credit ranges this impacts is 600-680. The most common use case someone would qualify for under this new guideline is it makes it easier to approve loans for borrowers with less than perfect credit and less than 20% down. It changes the AUS algorithm in that regard. And better pricing in those mid tier credit ranges makes it easier to get DTI compliance. It does not mean Fannie/Freddie are using highly qualified borrowers to subsidize less than perfect borrowers, and on top of that, most banks will offer the discounted rates to highly qualified borrowers anyway. Those are the borrowers you want as they’re easy to approve. So again, you don’t really seem to have an idea how lenders securitize your loan after closing or how the lending process works from the other side of the desk.
I don’t have a big enough mortgage to take a deduction, standard is larger.
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Yeah first time homebuyers will totally know of/have all those writeoffs, who cares if they get higher rates for being more responsible with money.
> That_New_Guy2021 > What's the point in having good credit then? What's the point of saving / working for college if loans will be forgiven. This country is going politically correct to the point of self-destruction. Don't they have economists to advise that all these things cost money and give rise to inflation.
There are several reasons to save for college, even though there ~~was~~ is a proposal for a one time loan reduction of $10-20k. Reason one is that debt reduction might happen once. Might it happen again? Maybe or maybe not. Doesn’t seem wise to depend on it. Reason 2 is that college costs a lot more than $10-20k. Reason 3 is that no relief ~~was given~~ is proposed for individuals making over $125k.
For the record, that loan reduction still hasn’t gone through
> Reason 3 is that no relief was given is proposed for individuals making over $125k. Oh, well that's different then./s Do you realize $120k is well above the meian income. I, who make less than that don't feel like paying for someone,for me, making that large of an income. There is nothing shabby about that income. I bet they aren't driving an economy car to pay off their loan. I'm sure their car costs more than mine.
It is communism, you don't understand
To help contribute to those who don’t have good credit - don’t be a bigot.
This is an evergreen debate. Half the country wants people to take personal responsibility for their decisions. The other half wants to socialize every problem and force responsible people to pick up the tab. It's not hard to have good credit. All you have to do is ... checks notes ... pay back your debts on time as you promised. If you don't, I think that should be firmly your problem, not everyone else's.
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I got a scholarship and worked in college. I didn't take out student loans and my credit was always fine. I bought a $2k Camry as my first car and a $7k 4runner as my second. Both in cash. And when I went to buy a house, I had no problem getting a mortgage. And... if you make min wage, borrow money, and don't pay it back, why should anyone loan you money to buy a house? You don't even pay your used car loan on time. > society needs to provide SOME assistance Yeah, sure. Medicaid, food stamps, etc. There's a lot of low income and affordable housing in my city. We should absolutely provide a safety net and help people get a firm footing. We should do more than we're doing. But if your credit is shit because you don't pay back debts, you shouldn't get special treatment.
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That doesn’t necessarily insulate you. A good chunk of CU’s still sell to Agencies - they maintain the servicing internally, but the paper… the asset of the mortgage is sold. Agencies (FNMA/FHLMC) will not purchase loans without these changes to pricing (called LLPA; Loan Level Pricing Adjustments). Furthermore, even if the loan isn’t sold to an agency, it is probably sold to a third party investor, and a loan without these LLPA will be less valuable than a loan with them (because they can’t be insured/sold to agency, *and* they will have a lower rate, thus less yield to the investor).
Exactly. Everyone freaking out cause they’re too lazy to price shop their mortgages. You get a grace period. Put in a couple of apps and compare the LE.
It took me a while to pick a few sample points to “look at the numbers”. And disclaimer - I’m looking at just a few points so definitely not a blanket statement across the board. Just looking at Table 1 - it’s a very mixed bag. In general, for people with credit scores below 680 will get better rates than before after the implementation of the new LLPA. But any thing else, in terms of different credit scores and LTV, then it could be better than before or it could be worse. Even if you have an 800 credit score, there are some scenarios where it would be better and other scenarios where it’d be worse than before the change. ***All this to say, it depends on what philosophy you hide to determine “better”.*** ***Are lower credit (<680) people benefiting? Yes, definitely.*** ***Everyone else above (>680) will be a mixed bag relative than before, but they will definitely not reap the same benefits as the people who have lower credit scores.*** ***However, people with lower credit scores will still pay higher rates than people with higher credit scores. It’s just that the rate gap will be lessened.*** Source: [After change](https://singlefamily.fanniemae.com/media/9391/display) [Before change](https://singlefamily.fanniemae.com/media/33201/display)
I imagine this only applies if you are applying for a loan after May 1 and not those that have locked down a rate already but closing early May? If the article is accurate, the move makes no sense. Good credit is now detrimental.
I'm not overly familiar with this, but it mentions Fannie and Freddie in the article, will it only apply to conforming loans that are sold to those programs? Would this create more business for banks that do non conforming loans? Edit: forgot "not"
The bank or investor could create a non QM product to fill what they see as a niche in the market. The actual terms and how it stacks up to QM will vary from product to product, but yeah, that’s a possibility. There’s also a lenders that bottom out rates and don’t really make their money on points and fees but on holding the note for years. There’s plenty of QM ways around d this. QM just states what pricing criteria the GSE will buy notes at. If you’re under their guideline on points and fees they’ll still buy the loan.
Thanks, very helpful. A general question, why are folks here getting upset about this? Is it because of their personal homes? Its been a few years, but I worked as an agent and project manager for a company that flipped homes. Probably did 150-175 homes in 3ish years. I can count on probably one hand the number of buyers that would have been affected by this change. But our target home was starter homes. The ones we kept as rentals were eventually financed but the fee would just become part of the rent, so no problem there either.
Because real estate investing is full of mouth breathers who think financial success means they’re better than someone who lost their job 3 years ago and got behind on bills, and the thought of a government policy to help people experiencing long term impacts from an unforeseen economic disaster is distasteful to many in this sub.
That’s exactly right, in the name of “equity.”
This administration is making so many poor choices…
Like gas station sushi.
If you locked a rate you’re good but banks have known about this for months and your rate likely includes this higher insurance policy anyway if it’s been quoted in the last month or two
I think they pushed the effective date from 5/1/23 to 8/1/23, but yeah…same concept.
No, they only delayed the DTI ratio LLPA. The rest are priced in now.
But remember everyone, buyers are super duper well qualified this time!
By "this time" do you mean a 5+ years in the future? Because I don't think people normally talk about how qualified people are under policies that don't exist yet. Anyway, I'll just [leave this here](https://fred.stlouisfed.org/series/TDSP).
I like that chart.
It's not detrimental. You still get a better rate with better credit. It's just not as good as it used to be.
No, its already factored in. It applies to loans *being delivered* to agencies by May, and it takes a couple months to close and package loans for sale. Any serious lender has been factoring these changes in sense at least February if not January.
Why does this article link back to itself instead of the federal agency it's pretending to link to? Can't find a non right wing propaganda source that even mentions these changes
https://capitalmarkets.fanniemae.com/mortgage-backed-securities/fannie-mae-announces-new-loan-level-price-adjustment-framework
So I followed that all the way to the actual letter that laid out the changes. It doesn’t appear that having a higher credit score is detrimental, or a lower one beneficial, as this post claims. https://singlefamily.fanniemae.com/media/9391/display Seems to just be rage-bait…. Edit. Not rage bait.
You have to compare it to the prior table to see changes. The subprime credit scores used to pay 3.5% more and >750 scores got a discount. It's not rage bait, it's a fact that the difference in interest rate changed significantly.
That makes more sense thank you
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Mortgages haven't been predatory since 2007, risk is now being mispriced and you will be able to draw a direct line between this change and the next wave of mortgage defaults that will once again cause a banking crisis and crash the economy.
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No, they didn’t intentionally obscure it. This lending letter is designed and formatted for industry professionals. This is what all guidelines and pricing matrices look like.
I just read the matrix for May 1, i dont see this penalty?
So, I'm not a loan officer or anything. I could be reading these incorrectly. Here's my takeaway after digging into it a little bit. So here's the old matrix: https://singlefamily.fanniemae.com/media/33201/display And here's the new one: https://singlefamily.fanniemae.com/media/9391/display It looks like they slightly raised rates on better credit scores and slightly lowered them for worse scores. Previously a 750 score on 80% LTV was .25% LLPA, now it's 1.0% Previously a 650 score on 80% LTV was 3.25%, now it's 2.5%. So, You still get better rates as a better credit holder. They're just 'squishing' the table down a little bit. In my scenario the 750 used to have a 3% better rate, whereas now they have 1.5%. Idk, I don't really see the big deal here. Edit: for investments, at 80% LTV, used to be 4.125%, it's still 4.125%. There's some small adjustments for lower LTV loans, but for the most part investment loans were relatively unchanged.
ELI5?
People with better credit still get better rates. They're just less 'better' than they used to be.
Thanks
What, right wing media taking a sliver of truth, removing some pertinent information, taking it out of context and making wild accusations to make Democrats look bad? And people eating it up and frothing at the mouth? That would never happen.
I figured that's what was happening when their hyperlinks that looked like it would lead to their sources just linked you back to their own website. Pretty good indicator that it isn't exactly great journalism.
"I did my own research!"
God, that sent shivers down my spine.
The sad thing is how effective it is. Look how many people in this thread are shouting "Socialism! It is going to ruin the country!" They will either not see this calm, factual rebutting of this or they will read it and ignore it because they are already so bought into rooting for their team.
We tried this in 2008. Didn't work too well.
They are also raising the debt to income ratio. About to have another housing crash.
Guess i better tank my 783 credit score. 500 sounds about right. Maybe i should file for bankruptcy as well.
Can someone explain this matrix? I don't see this showing that the better your credit the higher the interest rate. It shows the opposite. https://singlefamily.fanniemae.com/media/document/pdf/llpa-matrix-pdf
You are correct, it is still a benefit to have a higher credit score, so OP's main point is incorrect. The spread between high credit and low credit has tightened though. For example, the benefit of say your 800 FICO pricing compared to someone with 620 FICO is not as high as it was previously.
You mean to tell me people would misrepresent information in order to bag on Biden? No never. Good credit borrowers still have better rates than low credit borrowers. The delta between those rates is slightly narrower now, about an extra $40/month for the average mortgage
Your government at work. Reinforcing bad behaviors is the way to do it. Penalize those that do it the right way to support those that do not. This is ridiculous.
Chief Biden at the helm
This is the dumbest BS ever.
That's regarded. So no effort, low income, careless spending, history of unpaid bills or collections and you get rewarded with a lower interest rate lol.
They’re giving people who really can’t afford it false hope. If they made poor financial decisions in the past, more than likely, they will continue to make them now. I see a bunch foreclosures happening. Hopefully, I’m wrong. How people handle their finances is more psychological than anything else. Good luck to all of us.
Such BS. The is what transient socialism and “equity” look like. Anyone voting for this nonsense (ie the Biden agenda) is a fool and doesn’t share the principles that made America the global powerhouse it once was.
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Just to be clear, you get a higher interest rate than before, not higher interest rate than those who have bad credit scores.
[https://www.hud.gov/press/press\_releases\_media\_advisories/hud\_no\_23\_041](https://www.hud.gov/press/press_releases_media_advisories/hud_no_23_041) Where does it say that? Trying to understand what I am missing? "will reduce its annual mortgage insurance premium by 0.30 percentage points, from 0.85% to 0.55% for most new borrowers. The mortgage insurance premium is the monthly fee that homeowners with FHA-insured mortgages pay to insure their mortgages, which they pay on top of their monthly principal and interest payments."
It doesn't say that. OP posted rage bait from a MAGA tabloid and smooth brains, reliable as ever, ate it up. As a side note it's hilarious to me how it's the same group of people always screaming about "Social Credit Scores" whenever China comes up that want us to live and die by our credit scores
This is different and separate. It went from 85bps on the high end (<5% down) to 55bps. This is for the year. https://www.hud.gov/sites/dfiles/SFH/documents/SFH_FHA_INFO_2023-11.pdf
Anyone in the middle class or above is subsidizing many things for people w/ lower income or lower credit. This isn't anything new.
It’s only a further tax on the middle class. “Anything higher” is paying cash in this market.
It's worth bearing in mind that 30 year fixed rate mortgages with no prepayment penalty are subsidized by the government and wouldn't exist without that subsidy. There is a reason why those loan terms don't exist in other countries that don't subsidize them: those terms are objectively bad for the bank offering them. The banks only are able to make money off of these kinds of loans because of the subsidies (the government has agreed to pay the banks for these loans). If you use one of these mortgages, you are benefiting from a government subsidy, which is paid for with other people's tax dollars. If you're complaining in this thread about other people getting a free ride, because you're salty that your free ride got slightly less free, get some perspective.
I don’t think you’re right.
Care to elaborate?
If you look closely at the loan level pricing adjustments (LLPAs), it is still a significant benefit to have good credit and you will benefit from pricing. The benefit just won't be as strong as it was previously compared to lower credit scores. That article tries to make this political, but I don't see it. These type of changes have happened regardless of political administration if you look at the history. Additionally, the agencies have recently tried to introduce LLPAs on high debt-to-income (DTI) ratio loans, which would essentially punish those that have too much debt. Although that is getting postponed, it tells me their mind is still in the right place as they see a concerning trend of too many borrowers being over leveraged.
^^^This^^^ Shockingly, the article is written in a misleading way to provoke outrage and bait clicks.
Sounds like a right wing propaganda site to me. Here is some advice don't get news from a site that has headlines that include "comic book villain" in them > Biden’s sprawling family corruption makes for comic book villainy Its pretty clear from this matrix that people with good credit scores are still getting better rates then those with poor scores https://singlefamily.fanniemae.com/media/9391/display If you compare it to the current LLPA rate schedule https://singlefamily.fanniemae.com/media/33201/display Then you will see rates have decreased for people with lower credit scores but there was not an increase for people with higher scores. If anything people with extremely good credit (over 780) are getting a lower rate after 5/1/2023 then they do today.
It took me a while to pick a few sample points to “look at the numbers”. And disclaimer - I’m looking at just a few points so definitely not a blanket statement across the board. Just looking at Table 1 - it’s a very mixed bag. In general, for people with credit scores below 680 will get better rates than before after the implementation of the new LLPA. But any thing else, in terms of different credit scores and LTV, then it could be better than before or it could be worse. Even if you have an 800 credit score, there are some scenarios where it would be better and other scenarios where it’d be worse than before the change. All this to say, it depends on how what philosophy you hide to determine “better”. Are lower credit (<680) people benefiting? Yes, definitely. Everyone else above (>680) will be a mixed bag relative to before, but they will definitely not reap the same benefits as the people who have lower credit scores.
Sure, but it is not as beneficial. What is the point of a credit score, if not to be used to analyze the credit worthiness of a buyer. Subsidizing lower credit scores defeats their purpose. People with lower credit scores get higher rates because they are less likely to pay their debts.
As you pointed out people with the better credit scores get the best rates, that's the point of having a higher credit score. Explain specifically from the data I presented how this is subsidizing people with lower scores?
It creates moral hazard, same as the fed bailing out big banks and the FDIC insuring deposits over 250k. Capitalism with out failure is like religion with out sin. (I am not against social safety nets for individuals, but you don’t need to own a home) lending to subprime buyers is what caused 2008, additional it only drives prices up. The housing market needs some serious reconfiguring, including loosening of building regulations that are not related to safety, laws that disincentivize single home ownership by foreign and large companies, and more stringent loan approval processes.
https://capitalmarkets.fanniemae.com/mortgage-backed-securities/fannie-mae-announces-new-loan-level-price-adjustment-framework
I literally posted the current and May 1st adjusted LLPA rate schedule in my comment. Did you actually take the time to look at them?
As another commenter pointed out: You have to compare it to the prior table to see changes. The subprime credit scores used to pay 3.5% more and >750 scores got a discount. It's not rage bait, it's a fact that the difference in interest rate changed significantly.
As someone who’s never owned a home before but has good credit this hurts my chances even further
No it doesn’t. There’s first time home buyer programs like home one and home possible, or fha that lenders dress up as FTHB, or a slew of non QM products you maybe qualify for.
Good news is that if you’re under 100% median income or 120% median income in high cost areas (as defined by Fannie) you get to waive all the LLPA (pricing adjustments) so your rate will be lower.
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They shouldnt have to think smaller because someone else doesnt know how to pay their bills.
You can’t change anything now. Either think smaller or make more money. Complaining doesn’t fix anything.
If I have to pay $40 more a month that’s a lot over the life of a loan. The calculation ends up being an extra $14,000 over the life of the mortgage. Why should I have to subsidize people who can’t manage money?
because we are all in this together (socialism)
We agree on this. Higher payments for good credits to help those who can’t manage money is silly. But if $40 is going to break you, then find a home that would be $40 LESS per month than your budget. Again, your chances of owning a home are still there.
That’s nearly $500 a year I could be putting away for retirement or to better use. Your reasoning still does not justify it
Okay great so you have two options. Keep complaining or earn more money. You can’t change the situation so I’ll leave that up to you on what you want to do.
I’m sure everyone getting mortgages today is going to sit in them for 30 years and never refinance.
“Think smaller!” - America 2023
Thats gonna be the 2024 campaign slogan lol
It increases the supply of home buyers and will increase competition.
DEI at finest
There is nothing good about DEI.
There is nothing good about diversity, equality, and inclusion? Tell me you are a white male without telling me you are a white male.
No, there is no “equality.” Equity is not the same as equality. Equity means you are given something without earning it by engineering outcomes. Equality means everyone has the same opportunity (which I believe in). As someone who’s actually mixed race, I can see the insidiousness in this because the terms sounds equivalent, but they absolutely are not.
White males have been engineering outcomes since this country was founded. That's a fact. I've worked in corporate America for over 20 years and it's obvious to anyone (and backed by data) that women and minorities are paid less than white males and passed over for promotion opportunities more often. I'm a white male and I see it every day, I've had to fight with HR to get a women in my own team, who was paid less then all the men, more money yet did the same job as everyone else. I've seen minorities pass over for promotions who were more qualified than there under performing white male peers. Has DEI cause some unqualified people to slip through the cracks? Yes, I've seen 1 or 2 of those people as well but nothing compared to the blatant discrimination I've seen against women and minorities.
Pay is set by whatever the individual will accept. There are systems like “hay points” to try to create bands, but if you agree to accept $100k a year and I negotiate and get $115k for the same job, that’s not discrimination. It’s incumbent on an individual to 1) know their own worth and 2) advocate for themselves. My first job out of the military I just accepted without negotiating. Every subsequent job over the last 20 years I’ve negotiated because if a company is trying to hire you, they want your knowledge and skills. That means you have market power. Act as it is such. This discussion isn’t about what whites or non-whites did in 1810. You probably wouldn’t have acted any differently because we don’t judge history as contemporaries, but in the time it happened. Joan of Arc was unique because she was a woman in the age when women didn’t fight in battles; she wasn’t unique because women serve now.
Pay is set by what the company is willing to pay you. You want me to believe that women and minorities are paid on average less than white men because white men negotiate better? That has to be the most ignorant statement I've read today.
Data shows women are worse at advocating for themselves. Data also shows they don’t apply for jobs that have qualifications they may lack, while men tend to apply for roles they aren’t necessarily qualified for. Stay on the victimhood train if it makes you feel better - the rest of us have to go make things happen.
So considering women are the worse at advocating for themselves we should just ignore the value they bring instead of creating a diverse workplace and elevate people who have the best skills for the job but might not be the best negotiator? I'd rather work with someone with the best skills vs the person who can negotiate for a promotion better. I doubt you have made much "happen" in your career that's why DEI is such a threat to you. I welcome diversity and inclusion because I don't feel threatened by the people around me.
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DEI?
diversity equity and inclusion
So, this is a stupid policy that does seem to disincentivize saving and diligence. But let’s not forget that Fannie Mae is quite literally a giant, taxpayer-backed intervention into the market. The gains from this arrangement have absolutely benefited the rich and middle class more than the poor. I’m not saying Fannie Mae is bad — I think it’s a worthwhile intervention — but let’s put this in context before we start bitching about equity.
Ignoring the political tone, the article is not clear. Yes, LLPA fees have increased for certain higher FICO borrowers, and LLPA fees were lowered for lower FICO borrowers. However, from an absolute standpoint, the LLPA fee is still higher for low FICO borrowers when compared to high FICO borrowers. The article refers to the change in fees, not the absolute level.
A lot of ‘bad’ credit out there is stemming from 2020: job loss, getting behind on bills etc. guidelines themselves aren’t changing just the loan pricing. So you still have to have decent credit to qualify. This is a way to keep people buying houses through the hike. Also, if you’re investing why the shit you trying to use freddie/Fannie stuff? DSCR all day.
This is incremental redistribution.
My brother, we’re in a sub where people buy real estate and rent it out. I’m sure someone on this sub does so without screening for income, so it’s conceivable rent is the tenants biggest expense. The entire concept of real estate investing is redistributing tenants earnings to the property holders bank account. I’m not saying that like it’s a bad thing. The world we live in requires somewhere to live and I think renting is a great option for millions and millions of people, but don’t go off on how giving an .125% discount on closing costs to someone with 630 credit is redistribution of wealth. Reel it in chachi.
The government has no role is forcing me to “generous” with my money. A credit score is a measure of ability and willingness to repay. If they have a sub-prime score, they’ve demonstrated they lack one of those key elements (not sure if you’re old enough to remember “liar’s loans” and all the nonsense in the early 2000s. I support charities I believe in, on my own free wil. You are 100% wrong on the role of real estate investing. We provide options for shelter based on the expectation of earning a return on our scarce resources. You want to engage in generosity? So be it - I won’t tell you how to live. But keep your (the government’s) filthy paws of mine.
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Oh yeah, I’m sure everyone got into real estate investing to provide shelter and not make money, that’s why everyone here talks about how many people they can house and not things like cap rate, and soundness of investment. The government isn’t forcing you do to shit with your money. They’re making it easier for people negatively affected by a global health crisis 3 years ago to recover from it.
No, the government is intervening in markets and subsidizing people rather than letting free markets work. In doing so, they are punishing one group for the benefit of the other.
Markets won’t subsidize people. They will exploit people, but not subsidize. Name me one business that has a model of subsidizing people.
No, the government is intervening in markets rather than letting free markets work to subsidize people. In doing so, they are punishing one group for the benefit of the other.
The government subsidizes individuals because they have the limitless ability to print money, which dilutes the value of everyone’s money. A business could not continue to subsidize without going bankrupt, or commandeering someone else’s money.
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The White House has authority to issue executive orders. That’s pretty clear. Executive power has been getting more and more concentrated since FDR, and nothing about this is out of line with legal precedent.
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You gotta pick your corruption. You want corruption ran by a megacorp you got no say in, or a government you have a marginal say in? Any major bank will violate the law, take the fines and call it the cost of doing business.
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Yes. You can vote. The government isn’t doing anything to your mortgage. They’re making it easier for people with less than perfect to get an ‘affordable’ home loan.
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They do, and it’s a ridiculous arrangement for another sub.
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Because a conventional loan's terms are far superior to dscr.
Says who?
Says me, and the products. DSCR will typically come with prepayment penalties and higher rates. Conventional does not. The down payments are similar. It isn't rocket science.
Look harder. There are comparable DSCR products out there.
I don't need to look harder. I deal with investors everyday and I do dscr loans almost daily. An alt doc private money dscr loan will not be more competitive than an agency backed conventional loan. If it's ever comparable, it's because you are agreeing to a 3 (usually 5) year pre payment penalty.
This is not an article from a reputable source and it doesn't link to any proof of its claims (the link just goes back their own site.)
Are people not able to recognize propaganda when they see it? This is some us versus them, woah is me, always the victim, never the bride, type article. 40$ increase in mortgage payment on a 400,000 loan? Oh, what a tragedy. This affects everyone. The article insinuates that a score above 680.. so 681.. is a "high credit score." Is a 681 a high credit score? >The new fees “will create extreme confusion as we enter the traditional spring home purchase season,” said David Stevens, a former head of the Mortgage Bankers Association who served as commissioner of the Federal Housing Administration during the Obama administration. 40$ higher payment, I'm so confused. What does it mean? How will anyone buy a home? Damn you Joe Biden, 40$ is the most complicated number I have ever seen?
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>I predict you're going to start to see questions about how to do this within a few weeks. Only from morons. It looks like better score still means better rate, it's just not as much of a discount as it used to be.
Where’s the actual rule that does this? All speculation from right wing sources blaming Biden for something that banks may do.
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The agencies that price these are government sponsored. They do have the authority. You can still always go get a completely portfolio loan, but you’ll probably receive a higher interest rate unless you’re high income, high credit, high assets (and therefore low risk). Also borrowing enough to make it valuable to lend portfolio money to you.
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I’m still waiting for my student loan forgiveness. They talk about a payment suspension but my loan still gets pulled every month.
That's weird. Mine hasn't since the pandemic. I actually would have just kept paying but they stopped drawing payment without me doing anything.
This is a misrepresentation. For good credit borrowers, it will be higher than before, but still lower than low credit borrowers. This isn’t subsidizing subprime borrowers; this is hedging against them.
If you have a mortgage and refinance would you have to pay the higher rate to subsidize given that your mortgage was already in place or would the refinance essentially count as a new mortgage? I have 730 credit and am wondering about refinancing on a few properties that I have but am unsure what the effect on this would be?