You're gonna love this then:
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We just have historically not seen this before. You’ve always been incentivized to have better credit and pay your bills on time, because you will be rewarded with lower costs and lower fees to get into a home. David, obviously the peril in this is that you’re incentivizing bad credit scores to get lower costs. So, there’s only so long this could last. You won’t be able to pay for the risky homebuyers if people are incentivized to have lower credit.”
Stevens responded, “Yeah, I’ve literally just got an email from an executive with a mortgage lending company, he goes, so I guess we have to teach borrowers to worsen their credit before they apply for a mortgage in order to get the better price.
I mean, that’s a bit of an extreme, but yes, I totally recognize and appreciate the effort to bring more people into home ownership who have traditionally not had that opportunity. But using Fannie Mae and Freddie Mac for these sort of political purposes may not be the best thing to do, and frankly, I think it violates the entire discipline that these two companies have operated under.
And it’s going to end up costing some borrowers who are putting 15, 20% down payments, who have credit scores in the 700s and above more for their mortgage so they can help pay for those who are getting the discount... "
Fmr. Obama Housing Official: Biden Admin. Mortgage Plan Incentivizes Bad Credit for 'Political Purposes'
On Thursday's broadcast of the Fox News Channel's "America Reports," David Stevens, who served as Federal Housing Association Commissioner during the | Clips
www.breitbart.com
We just have historically not seen this before. You’ve always been incentivized to have better credit and pay your bills on time, because you will be rewarded with lower costs and lower fees to get into a home. David, obviously the peril in this is that you’re incentivizing bad credit scores to get lower costs. So, there’s only so long this could last. You won’t be able to pay for the risky homebuyers if people are incentivized to have lower credit.”
Stevens responded, “Yeah, I’ve literally just got an email from an executive with a mortgage lending company, he goes, so I guess we have to teach borrowers to worsen their credit before they apply for a mortgage in order to get the better price.
I mean, that’s a bit of an extreme, but yes, I totally recognize and appreciate the effort to bring more people into home ownership who have traditionally not had that opportunity. But using Fannie Mae and Freddie Mac for these sort of political purposes may not be the best thing to do, and frankly, I think it violates the entire discipline that these two companies have operated under.
And it’s going to end up costing some borrowers who are putting 15, 20% down payments, who have credit scores in the 700s and above more for their mortgage so they can help pay for those who are getting the discount... "
