SAJ-99
Well-known member
Nothing in these LLPA tables below looks unusual to me. The adjustments (and rates) reflect the probability of default. Adjusting these is normal. It is incorrect, and disingenuous, to suggest one group is paying more to fund another group. That is not happening. I suspect they are just being adjusted to reflect the most recent historical data. But like anything nowadays, it is political.Best I can tell the administrations new rule will change the LLPA from the FHFA and that will increase fees for higher credit score borrowers and decrease fees for lower credit score borrowers on federally backed mortgages. Heaven forbid we incentivize paying your bills on time and being financially solvent. The story is picking up more coverage on a variety of news sources. With all the culture war stuff dominating the news cycle, it’s tough for things that actually affect people’s lives to make it to the top. I believe it takes effect May 1.
We saw in the GFC that borrower credit score was not a great indicator of default, and often “higher risk” Mortgages defaulted at a lower rate than those that looked higher in “quality”. Maybe those with high credit scores could afford better bankruptcy lawyers?