Here’s a story that hasn’t drawn nearly enough attention yet. A new change being driven by the Biden administration’s Federal Housing Authority will cause new fees and increased interest rates for home mortgages. Starting on May 1st, Fannie Mae and Freddie Mac will offer discounted mortgage rates to prospective home buyers with “riskier credit backgrounds” (meaning people with poor credit ratings) to enable them to qualify for a mortgage. But that will generate more losses in the system and that money will have to be made up somehow. So people holding lower-cost mortgages because they have a good credit rating will be charged more, leading to their monthly mortgage payments going up. I suppose this is the latest front in the battle for “equity.” (NY Post)
A little-noticed revamp of federal rules on mortgage fees will offer discounted rates for home buyers with riskier credit backgrounds – and force higher-credit homebuyers to foot the bill, The Post has learned.
Fannie Mae and Freddie Mac will enact changes to fees known as loan-level price adjustments (LLPAs) on May 1 that will affect mortgages originating at private banks nationwide, from Wells Fargo to JPMorgan Chase, effectively tweaking interest rates paid by the vast majority of homebuyers. Read more…