President Joe Biden’s regime is now forcing Americans with good credit to help homeowners with bad credit by paying higher fees on their mortgages, all in the name of equity..“The higher fees for those with good credit will be redistributed to home buyers with poor credit,” reports Blaze News..The program came into effect on May 1, with Fannie Mae and Freddie Mac, the federally backed mortgage companies, implementing new loan-level price adjustments (LLPA) with private banks. .LLPAs are defined in a document from the Federal Deposit Insurance Corporation as “risk-based pricing adjustments that vary based on credit score, loan-to-value ratio, type of product, and various other factors, charged at the time of origination. Most lenders convert LLPAs into the interest rate on the mortgage, which the borrower pays over time.”.The Washington Timesreported, "Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees.".According to the New York Post, “Buyers with credit scores of 679 or lower will have their fees slashed, resulting in more favourable mortgage rates. For example, a buyer with a 620 FICO credit score with a down payment of 5% or less gets a 1.75% fee discount, a decrease from the old fee rate of 3.5% for that bracket."."The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well,” Ian Wright, a senior loan officer at Bay Equity Home Loans in the San Francisco area, told the Washington Times..“It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing." .Speaking to the New York Post, David Stevens, a former head of the Mortgage Bankers Association and commissioner of the Federal Housing Administration during the Obama administration, called the new rule "unprecedented."."This was a blatant and significant cut of fees for their highest-risk borrowers and a clear increase in much better credit quality buyers, which just clarified to the world that this move was a pretty significant cross-subsidy pricing change," said Stevens, who wrote on social media: "This confusing approach won’t work and more importantly couldn’t come at a worse time for an industry struggling to get back on its feet after these past 12 months. To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders.".The rule change was defended by Sandra Thompson, who was appointed by Joe Biden as director of the Federal Housing Finance Agency, saying it would "increase pricing support for purchase borrowers limited by income or by wealth." .“The new rules arrive as the housing market struggles after the average 30-year fixed mortgage rate spiked to more than 7% in March following multiple interest rate increases by the Federal Reserve,” reports Blaze News. “In January 2021, mortgage rates in the U.S. set a record low, 2.65% for a 30-year, fixed loan.”.Meanwhile, Eyewitness News ABC7 in Los Angeles reports utility companies in California are also exploring a restructuring of customer billing, which could lead to customers being charged based on income..“Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric filed a joint proposal this week for a flat-rate charge based on income,” reports the news outlet. “The plan would break monthly bills in two parts: The fixed-income rate, plus a reduced usage charge based on consumption.”.If approved, low-income households would pay as low as $15 a month, while households with an income of more than $180,000 would pay up to $85 more per month..“While that specific cost would go up, the actual electricity rate would go down by a third. It means customers could control their bill somewhat, if they're able to reduce electricity use,” says ABC7. “The income-based bill proposal is part of the companies' compliance with legislation passed by the California state government last year requiring these types of plans for utilities.”.The proposal has yet to be approved by the California Public Utilities Commission, with a final decision expected by mid-2024.
