by Tiffany Layne at theblacksphere.net
On what planet does this plan make sense? I assume it only jives on Planet Biden.
While we’re not exactly sure how the final numbers will pan out, experts estimate that borrowers with credit scores above 680ish will spend an additional $10 per $100K on their loans. Thus, a $400,000 mortgage will end up costing $40 more per month.
Forty-dollars. That’s doesn’t sound too bad, does it? Before you dismiss it as a minimal cost, do the math. On the aforementioned $400k loan, the payment would go from approximately $2,760 to $2,800. Over the life of a 30-year note, the loan cost would increase from $993,600 to $1,008,000- a difference of $14,400. Actually, that isn’t even accounting for additional taxes or insurance premiums.
Fox News adds:
“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, told the 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.”
The Federal Housing Finance Agency, which oversees federally backed home mortgage companies Fannie Mae and Freddie Mac, has long sought to give consumers more affordable housing options. But those who work in the industry believe the new rules will only serve to frustrate and confuse people.
“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,” David Stevens, a former commissioner of the Federal Housing Administration during the Obama administration, wrote in a social media post responding to the new rules. “To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders.”