Starting next month, homebuyers with good credit will have to pay a monthly mortgage fee to subsidize people with bad credit who want mortgage loans.
The fee, which was instituted by a Biden Administration rule – not by Congress – adds about $40 more a month ($480 per year) to the mortgages of those with credit scores of 680 buying homes in the $400,000 range.
The Biden Administration’s argument is that it isn’t fair that people with poor credit ratings have a harder time getting approved for mortgage loans, and have to pay higher rates, if they do get them. Thus, the fee is meant to “level the playing field” by subsidizing the mortgages of high-risk homebuyers. Or, as Biden appointee and Federal Housing Finance Agency (FHFA) Director Sandra Thompson puts it, increasing their “pricing support.” FHFA is the agency through which the rule was issued.
The new fee is part of the environmental, social and governance (ESG) movement, which seeks to impose liberal ideology on businesses and, by extension, American citizens.
Amid rising interest rates, existing-home sales fell a seasonally-adjusted 2.4% in March, compared to February, and plummeted 22.0% from one year ago, the National Association of Realtors (NAR) reported on Thursday. The median existing-home sales price dipped 0.9% from the previous year to $375,700, NAR notes.
If the Biden Administration wants to help those with poor credit buy homes, “This is not the way to do it," Former Federal Housing Administration Commissioner David Stevens told Fox Business on Thursday.
Stevens, who served in the Obama Administration, explained how “they're actually raising fees on better creditworthy borrowers”:
"For the first time ever, the [FHFA] director, in an effort to bring more first-time homebuyers - particularly minority homebuyers into the GSE's lending programs - made a shift where she lowered the fees being charged to borrowers with low down payments and low credit scores and the way she compensated or they compensated for that loss of income, that capital costs that they're going to incur, is they're actually raising fees on better creditworthy borrowers who are putting down much larger down payments."
"This has really convoluted the entire discipline and credit risk pricing structure,” Stevens said.
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