A Washington Times report Tuesday sets out the circumstances around the change. It states:
Experts believe that borrowers with a credit score of about 680 would pay around $40 more per month on a $400,000 mortgage under rules from the Federal Housing Finance Agency that go into effect May 1, costs that will help subsidize people with lower credit ratings also looking for a mortgage.
“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, outlined to 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.”
Fox News further states the Federal Housing Finance Agency, which oversees federally backed home mortgage companies Fannie Mae and Freddie Mac, believes the change will 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 as home ownership becomes an increasingly distant dream for so many under the Biden administration.
Biden's disastrous inflationary economy is roiling home buyers. https://t.co/hmQihy2pr8
— Breitbart News (@BreitbartNews) June 4, 2022
“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 for homebuyers.
“To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders.”
“It’s going to be a challenge trying to explain to somebody that says, ‘I worked my whole life for high credit and I’ve put a lot of money down and you’re telling me that’s a negative now?’ That’s a hard conversation to have,” one worried Arizona-based mortgage loan originator told the New York Post.
Sales of new single-family homes in the U.S. plunged in April, the fourth consecutive monthly decline, falling to the lowest level since April of 2020. https://t.co/zOaG9TF2XA
— Breitbart News (@BreitbartNews) May 24, 2022
Federal Housing Finance Agency Director Sandra Thompson said the new rules are designed to “increase pricing support for purchase borrowers limited by income or by wealth” and comes with what she called “minimal” fee changes.
The fee changes for homebuyers are slated to take effect on May 1.
