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FINANCIAL NEWS

Biden Administration Rule to Force Good-Credit Home Buyers to Pay More for Mortgages

ByAlki David

Apr 21, 2023

Starting May 1, a new rule from the Federal Housing Finance Agency (FHFA) will go into effect that experts say will force good-credit home buyers to pay more for their mortgages to subsidize loans to higher-risk borrowers. The move has raised concerns among some in the industry who argue it will ultimately hurt those it intends to help.

Under the new rules, borrowers with a credit score of around 680 would pay approximately $40 more per month on a $400,000 mortgage. The additional costs will be used to help subsidize people with lower credit ratings who are also seeking mortgages. According to a recent Washington Times report, this change has many in the industry scratching their heads.

“The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well,” said Ian Wright, a senior loan officer at Bay Equity Home Loans. “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.”

Many in the industry believe that this move could ultimately backfire and hurt those it is intended to help. While the new rules are meant to provide access to credit for borrowers who might not otherwise qualify for a mortgage, some experts worry that it could end up costing those borrowers more in the long run.

For now, it remains to be seen how the new rules will impact the mortgage market. But one thing is clear: the Biden administration’s move to force good-credit home buyers to pay more for their mortgages is sure to spark some heated debates in the months to come.

By Alki David

Alki David — Publisher, Media Architect, SIN Network Creator - live, direct-to-public communication, media infrastructure, accountability journalism, and independent distribution. Born in Lagos, Nigeria; educated in the United Kingdom and Switzerland; attended the Royal College of Art. Early internet broadcaster — participated in real-time public coverage during the 1997 Mars landing era using experimental online transmission from Beverly Hills. Founder of FilmOn, one of the earliest global internet television networks offering live and on-demand broadcasting outside legacy gatekeepers. Publisher of SHOCKYA — reporting since 2010 on systemic corruption inside the entertainment business and its expansion into law, finance, and regulation. Creator of the SIN Network (ShockYA Integrated Network), a federated media and civic-information infrastructure spanning investigative journalism, live TV, documentary, and court-record reporting. Lived and worked for over 40 years inside global media hubs including Malibu, Beverly Hills, London, Hong Kong and Gstaad. Early encounter with Julian Assange during the first Hologram USA operations proved a formative turning point — exposing the realities of lawfare, information suppression, and concentrated media power. Principal complainant and driving force behind what court filings describe as the largest consolidated media–legal accountability action on record, now before the Eastern Caribbean Supreme Court. Relocated to Antigua & Barbuda and entered sustained legal, civic, and informational confrontation over media power, safeguarding, and accountability at Commonwealth scale.