Oh Give Me a Home Where Joe Biden Don't Roam

Timothy Birdnow

Joe Biden is damned and determined to wreck the American economy. He seems hell-bent on plunging this nation into a full blown depression.

He's implementing a mad scheme whereby people with good credit scores will have to subsidize those without in homebuying.

This is basically what the Democrats did during the leadup to the Great Recession. The subprime mortgage market was bundled with good mortgages so they could be taken off the books. Biden is reinstituting that here.

The fee changes will go into effect May 1 as part of the Federal Housing Finance Agency’s push for affordable housing, and they will affect mortgages originating at private banks across the country. The federally backed home mortgage companies Fannie Mae and Freddie Mac will enact the loan-level price adjustments, or LLPAs.

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.

The National Association of Realtors is not happy. Here is their statement:

"We appreciate FHFA’sefforts to revise the structure for loan level pricing adjustments as well as making the 2022 changes permanent. NAR and our members were supportive of most of the changes made to LLPAs this past fall, and we will continue to advocate for LLPA reform as the housing market continues to struggle with the sharpest blow to affordability in decades. These changes make permanent reduced or eliminated fees for first-time homebuyers and those with low or moderate incomes. Furthermore, these changes include significant reduced fees for many borrowers with lower credit scores, but strong down payments. However, fees are raised on some borrowers with good credit scores and moderate down payments, hitting middle-wealth homebuyers. Furthermore, FHFA included new fees on borrowers with higher debt-to-income scores. NAR will review other changes in the new LLPA structure and share our concerns with the FHFA.

In the wake of a three-percentage point increase in mortgage rates, now is not the time to raise fees on homebuyers. Furthermore, the FHFA needs to address its recent increase in fees on homebuyers in high-cost markets as well as guarantee fees that impact all homebuyers. Homebuyers are hurting and these changes are overdue. Now is the time.”

Fannie Mae and Freddie Mac charge both a market-wide flat guarantee fee as well as upfront fees LLPAs that are tailored to credit scores and down payments for individual borrowers. The FHFA directed Fannie Mae and Freddie Mac to reduce the LLPAs in 2022 on homebuyers but raised them in high-cost markets. Furthermore, guarantee fees were never reduced in the wake of the 2017 Tax Cuts and Jobs Act that lowered their costs. NAR looks forward to continuing our work with the FHFA to collaborating to improve affordability for homebuyers.

Here's more on our government's Marxist "from each according to his ability to each according to his need" program.

Homebuying has dropped off precipitously as interest rates have risen, inflation has risen, and wages have not kept pace. Now Biden is going to strangle the real estate market by manipulating the cost to homebuyers.

What will happen is people won't buy, they'll rent, or stay put. And as the housing markets slows to a crawl the entire economy suffers, from construction companies to contractors to municipal governments losing tax revenue to the banks that lend and service loans.

And for whom are we making this sacrifice?  People who will probably not be able to afford the houses they purchase and will probably wind in default - same as in 2008.

And this at a time when our economy is barely breathing.

I refuse to believe Biden is that incompetent.

Posted by: Timothy Birdnow at 11:08 AM | Comments (3) | Add Comment
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