If you pay more because of your high credit score does it make your credit score even higher? /s
Jojo
11 months ago
So what’s the point of this new policy? I assume it is to give minorities, who often have poorer credit histories, more buying power compared to non-minorities (who often have better credit ratings and therefore qualify for lower interest rates) through lower mortgage rates than they would otherwise be able to obtain?
Christoball
11 months ago
Traditionally those with the lowest credit scores paid the highest interest. They used the excuse that higher interest rates for that group of people was necessary to cover the losses from that group’s higher default rate. The truth is that those people with the highest credit scores are the most likely to leverage the economy and perpetuate imbalances in lower credit scores for the other half. In an inflationary fictional reserve banking economy, those with access to money first win.
Tawdzilla
11 months ago
I don’t think we’d be any worse off if the Mayhem guy (from Allstate commercials) were running the country.
ColoradoAccountant
11 months ago
Lenin learned that with a small group of fanatics he could take Russia. Hitler and a small group of fanatics took Germany. In Iran, a small group of fanatics took the country.
Since people buy what they can pay monthly looks like it may lower home sales price
Christoball
11 months ago
Just as college degrees are a poor gauge of intelligence and common sense; credit scores are such a poor gauge of character and financial worthiness. It is all fabricated money anyway.
I have always been current. Was debt free and owned two Ranches free and clear by age 35, all out of hard work and careful planning. I don’t think I even had a credit score until my first credit card at age 40 in 2001. Credit scores just determine ones ability to leverage until it all falls apart.
Webej
11 months ago
Schools blazed the trail
scoring people not on final exams,
University entrance scored by your privilege handicap
self-awarded college grades
reforming physical fitness goals in the military
now credit scores and credit score offsets
America is keen on circling the drain.
klausmkl
11 months ago
Uncle Joe has all sorts of surprises for us. We the People voted him in. We the People deserve everything we get, just look us. They have us bickering over pronoun useage. An obese population of folk with an ethos of entitlement.
Not me. I never vote for anyone that wants the job.
Mish
11 months ago
Somehow my chart did not post.
Added
hmk
11 months ago
Thanks for writing about that. The first thing I thought was,is that even legal. Also someone mentioned Medicare premiums are also based on income. That also doesn’t seem like it is legal either but has never been challenged in the courts.
RonJ
11 months ago
“This is truly incomprehensible to me.”
It was once incomprehensible that the government would confiscate peoples privately owned gold.
Matt Taibbi: “Representative Stacey Plaskett, who called Michael Shellenberger and me “direct threats to people who oppose them,” is now threatening me with prison – over Mehdi Hasan’s uncorrected error”
It is the season of incomprehensibles.
asteester
11 months ago
It is not true that you should skip payments to lower your score before taking a mortgage. You still get worse rates the lower your score is. It’s just not as drastic of a difference now. And not as great a rate for the high scores. See the LLPA tables… link to singlefamily.fanniemae.com
8dots
11 months ago
In Aug/Sept if US gov default, it will be called “late payment” on it’s bonds with negative LLPA from the Fed in US gov general account.
8dots
11 months ago
RE DEI = diversity, equality, inclusion to help the poor for new and Existing mortgages. Biden fufu the rich.
Billy
11 months ago
As I’ve said before, I find it a rewarding challenge to come up with work-arounds. So here is my solution:
A new company called TCSR. Making home payments more affordable since 2023.
If you are looking at purchasing a new home, we can help reduce your monthly payments for POGC (people of good credit)
For a low payment of $100 our one-of-a-kind, never before, automated software will lower your credit score, then automatically file disputes against these negative marks, raising your score back to what it is now.
For those of you who haven’t guessed already TCSR stands for temporary credit score reducer.
Feel free to make this company for yourself and make millions. All I ask is that you give credit to Mish.
GruesomeHarvest
11 months ago
It’s the Progressive’s wet dream, redistributive justice. Soon to be followed by black discounts on merchandise, and a large poll tax on Republicans and Independents. This won’t end until the whole thing falls apart: which isn’t too far in the future.
Exactly. More people competing drives up prices, which drives up profits.
Mac Timred
11 months ago
Hey Mish you’re complaining about the government’s new rules FOR GOVERNMENT MONEY.
Don’t like them, go get a private mortgage loan from your bank.
The home mortgage industry is more than halfway to socialism and you’re not complaining about that, you’re complaining that the socialism is not favoring you as much as it did.
If you are actually a capitalist, complain about the socialist mortgage system! But beware pushback from the NAR & MBA! They are happy with a socialist system bc it lines their pockets better.
Personally I am grateful to Mish is giving us a place to complain in free of charge. Normally he should charge you every time you complain about him not being exactly up to your imaginary standard.
HippyDippy
11 months ago
Legal is whatever the state says is legal. By definition. After all, don’t the courts operate under the umbrella of government? As I’ve stated numerous times to many people’s chagrin and derision, the state will always come up with the worst possible decision to fix its own previous debacle. I stand by my prediction that the FED will overshoot its “goal” of recession, and go straight to currency crushing depression.
On another note, I have a gray credit score. Non-existent. Took me a while to manage that one! Neither a borrower nor a lender be. Some claim that it cuts back on wealth creation, but I claim it makes me more creative in my wealth accumulation. Though dollars are not the only indicator of wealth that I measure. I’m rather curious what my rate would be, but not enough to bother with it.
The FED and other central banksters have been overshooting their mandates for the past fifteen years or so by punishing your prudent economic behaviour. I am sure you can stand a bit of relief.
ThinkEconomically
11 months ago
2 + 2 no longer = 4. Those on the left simply know nothing economics. Nor do they care.
The right never came up with an idiot idea like this one. This idea is very Venezuelan. I am pretty sure a lot of folks down there are still eating of garbage cans.
You write that as if they weren’t just two sides of the same coin. Remember, they share the ownership of the presidential debates. Only the 2 views are known by most. They have only two major parties because the ignorant loathe the effort required to understand the nuance of anything. Congratulations on buying into their machine of polarization in which they encourage the masses to hate each other as much as they hate themselves. Keeps their minds off their shame at demanding their own enslavement.
How about that border wall? Keeping all the immigrants out nicely, isn’t it?
RyanL
11 months ago
I call it the deadbeat dividend.
shamrock
11 months ago
Once again you claim that “The Better Your Credit Score the Higher Your Mortgage Rate” , which is not accurate. Using your example a person with a 720 credit score has an LLPA of 1.25% and someone with score of 640 gets hit with 2.50%. Is 1.25 higher than 2.50?
So is this an attempt to defend this handout to grifters at the expense of people who pay their bills or are you just playing semantic games because he didn’t say the higher your credit score the more you are penalized?
I’m not defending or criticizing the new pricing because I don’t know what the optimal price for all the various combinations in those matrices should be, but Fannie Mae does. Maybe they have been undercharging good credit ratings and overcharging moderate credit ratings and the new prices are a reflection of that. These matrices were not handed down by God thousands of years ago and probably get adjusted all the time.
Well that would be a good attempt at whitewashing this, but they were already pretty clear this is to subsidize deadbeats
“FHFA is taking another step to ensure that the Enterprises advance their mission of facilitating equitable and sustainable access to homeownership.”
Nuddernoitall
11 months ago
“…is it legal..?”
In this new world of post-modernism, it doesn’t matter if it’s legal. This is the new world where 1 +1 = 3 (because they say so). This is a world where a man can identify as a woman, or a plant, or an animal and vice versa. This is the new world where bad is good and good is bad, and every previous learned fact thru centuries of enlightenment is challenged and perhaps rejected.
So in that context, sure… it makes total sense that someone with a better credit score is going to pay more than a person with a terrible credit score. (Some might say my comment is all in jest, and of course some of it is, but the true reality is we’re driving headlong into a world where my tongue-in-cheek comments are closer to the “new” truths than sane people will understand.)
Next everyone will identify as someone with a poor credit score 🙂
KidHorn
11 months ago
When did the Biden administration start caring if what they do is legal or not? I’m sure Merrick Garland will look into legality issues.
MPO45v2
11 months ago
Someone with a credit score 720-739 with a 20% to 25% down payment has a LLPA of 0.50% before May 1 and 1.25% May 1 or later.
So what am I missing, if you have a credit score > 720 just don’t put 20% down and that “breaks” the condition. Put down 5%, lock in the low mortgage then pay 15% to the mortgage and request the PMI drop. Alternative 2 is to not use Fannie Mae for your mortgage, there are 5000+ other banks out there.
Perhaps Fannie is trying to focus on subprime mortgages and get rid of prime mortgages with these new rules. You’d be crazy to pay more for a loan than someone else with worse credit than you.
astroboy
11 months ago
Covid probably makes it legal. If covid can allow Biden to cancel half a trillion in student loan debt, then why not this piece of stupidity. Covid can do anything!
Don’t forget that it allowed Trump to put out an untested vaccine, which we give to our kids because we should always risk our children’s health to save the old. There are no good “guys” in politics. They only live to profit off your success. Which they endeavor to turn into misery.
Well, if you worked for a company with more that 50 people you did, except that fell thru in the end. A lot of people, such as myself, had to take the vax or get fired. If I lost my job who was going to feed my kids? Not really a choice, there.
I don’t think we’d be any worse off if the Mayhem guy (from Allstate commercials) were running the country.
Since people buy what they can pay monthly looks like it may lower home sales price
More specifically, Experion notes that only 35 percent of consumers have a credit score below 680.”
So is this an attempt to defend this handout to grifters at the expense of people who pay their bills or are you just playing semantic games because he didn’t say the higher your credit score the more you are penalized?