![]() ![]() Marco Rubio, sent a letter last month to FHFA Director Sandra Thompson, a Biden nominee. The fee changes have garnered heated criticism from conservatives.Įighteen senators, including Florida Sen. It is important to note that those with lower credit scores will still pay more overall than those with better credit (so don’t go out and try to ruin your credit) – they’ll just be paying less than they were before. Don't have the app? Download it for free from your app store. Opinion alerts: Get columns from your favorite columnists + expert analysis on top issues, delivered straight to your device through the USA TODAY app. Just look at what happened in 2008 with the mortgage meltdown. It’s also risky to incentivize those who can’t afford a home loan to take one. Plenty of wealthier borrowers don’t have good credit, just as there are low-income families who have maintained high credit scores. Progressives like to link low-income borrowers with those who have bad credit. That may sound like a worthy goal, yet it’s worth questioning who must pay for it. The new fees are tied to a bigger plan from the housing agency and Biden administration to offer "equitable" access to homeownership. These loans comprise about 60% of the mortgage market.īiden must compromise on debt ceiling: Otherwise, we're all headed toward disaster This housing rule change will have broad impact, as it affects most loans guaranteed by Fannie Mae or Freddie Mac, which are in turn backed by taxpayers. Who knows what's best for your kids? Hint: Biden and Democrats don't think it's parents ‘Equitable’ for whom?īiden tried to do something similar with his $400 billion-plus student loan “forgiveness” plan by creating a situation that unfairly penalizes those who have paid the loans they took out – and the ones who never got loans in the first place – by making them pay for this leniency. But what’s the message that President Joe Biden and Democrats are sending here? It’s definitely not one of rewarding smart decisions. The goal is to encourage more home ownership. “So the kind of outrage you may be hearing in conservative circles about how this is penalizing people who have good credit to subsidize people with bad credit is 100% true.” “It is absolutely intended to create a greater cross-subsidy,” Mark Calabria, a senior adviser at the Cato Institute and former FHFA director, told me. Here’s why you should care: If you are an American who has worked hard for good credit, you are likely to pay more on your home loan now than you would have before this revision.īy charging borrowers with good credit scores higher fees, those with non-stellar scores will pay less steep fees than they did previously. It changes mortgage fees based on a borrower’s credit score. Want to keep reading? Learn the basics of inflation.You may have missed the memo, but the Biden administration's Federal Housing Finance Agency (FHFA) created a new rule, which took effect Monday. When inflation is too low, the Federal Reserve typically lowers interest rates to stimulate the economy and move inflation higher. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down. The Federal Reserve seeks to control inflation by influencing interest rates. ![]() The Federal Reserve sees a rate of inflation of 2 percent per year-as measured by a particular price index, called the price index for personal consumption expenditures-as the right amount of inflation. ![]() ![]() Part of the mission given to the Federal Reserve by Congress is to keep prices stable-that is, to keep prices from rising or falling too quickly. The Federal Reserve, like other central banks, was established to foster economic prosperity and social welfare. Imagine going to the store with boxes full of money and not being able to buy anything with it because prices have gotten so high! At such high inflation rates, the economy tends to break down. Some countries have experienced such high inflation rates that their money became worthless. ![]()
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