Here They Come Again,This Time Mortgages…

[dudley0]

I got some of my best mortgage deals during all the 'bad' lending times.

Due diligence.

I miss the way you could structure loans to fit your style. Lenders were almost begging me to take out loans.

Don't get me wrong, I realize there were predatory lenders out there. But when someone was making (then) minimum wage working under 40 hours a week why would they think they could afford the loans they were taking out? If I don't understand something I ask someone who does, or I figure it out on my own.

The idiots ruined it for the people like me that were following thru with the loans as they were structured.

Sorry, bit of a rant there. But man do I miss those loans.

 

[BehindBlueI's]

https://www.mortgagenewsdaily.com/news/01192023-big-llpa-changes from this January details the changes.

In short, lower credit scores still pay more. *surprised face here* The gap is just narrower. People with the best credit stay the same or also get a break in every scenario but one, a change at 80-85% LTV. Note these are the percentage of *change* from the old value, not the new value.

Original source documents from Fannie Mae: https://singlefamily.fanniemae.com/media/9391/display See page 2 of 9 for actual rates. There is absolutely no scenario where lower credit scores get better rates with other factors (like down payment) being the same.

Stop believing the media.

 

[BehindBlueI's]

Last month mine was at 779 then it dropped 18 points for no reason this month.
Only 7% credit usage, no new accounts, or credit checks, no late payments etc.
Why would it drop 18 points for no reason?

Did you close an account? Did you consider opening an account and get a hard credit check?

Is your credit frozen and are you *absolutely sure* nobody opened an account somewhere in your name, got a cell phone plan, etc? If it's not frozen, do it now. It's free, it's easy, and makes it ay harder for someone to steal your identity. Remember to freeze with all 3 major credit bureaus.

 

[dudley0]

I need to freeze ours again. Pain when you forget and go to buy something, but more of a pain if someone decides to become you.

Thanks for the reminder.

 

[DadSmith]

Did you close an account? Did you consider opening an account and get a hard credit check?

Is your credit frozen and are you *absolutely sure* nobody opened an account somewhere in your name, got a cell phone plan, etc? If it's not frozen, do it now. It's free, it's easy, and makes it ay harder for someone to steal your identity. Remember to freeze with all 3 major credit bureaus.

My credit is frozen with all three companies for around 8 years now, and I only unfreeze when I need to, and that is Experian only.
I haven't had a credit checked in over a year. I've recovered from that a long time ago.
Nothing new other than paying it down more.
I payed it down from around 12% to 7% usage.
I figured that should improve it not bring it down.

 

[Cameramonkey]

Isn't this the same engineered destruction that played out in 08/09? I recall interest only 3 year balloon style mortgages then, so this is another angle on a game with the same end results. Yes I agree with the bigger plan for selected big players who "return the favor" to the hand that FED them on the top end, and the vote buying/chaos on the bottom end.

Yes. And Senator Obama is to blame. He is the one who pushed to end redlining on the lending side in the mid 90s. So you ended up with people who had no business taking out loans in the amount they were approved for, and to no one's surprise they defaulted. No, you were not denied home financing because you were black. You were denied because you didnt have the income for it.

When we bought out house in 03, we were told we were prequalified for up to $450,000. Um, excuse me? What!?!?! It wasnt a mistake. But we knew that we REALLY couldnt afford that much house, and chose wisely based on my income. ($89,500 repo) And a good number of those defaults in the 09 timeframe were folks who listened to the lenders granting ridiculous loans.

 

[Ingomike]

https://www.mortgagenewsdaily.com/news/01192023-big-llpa-changes from this January details the changes.

In short, lower credit scores still pay more. *surprised face here* The gap is just narrower. People with the best credit stay the same or also get a break in every scenario but one, a change at 80-85% LTV. Note these are the percentage of *change* from the old value, not the new value.

Original source documents from Fannie Mae: https://singlefamily.fanniemae.com/media/9391/display See page 2 of 9 for actual rates. There is absolutely no scenario where lower credit scores get better rates with other factors (like down payment) being the same.

Stop believing the media.

Let’s review what was reported in the original post.

“Mortgage fee rules quietly get overhauled, resulting in discounted rates for riskier-credit homebuyers & forcing higher-credit homebuyers to foot the bill...”

Mortgage fee rules were changed, they discounted the rates paid by riskier buyers, the cost of defaults will be borne by higher credit borrowers, usually homebuyers.

What is incorrect in this?

 

[BugI02]

But when someone was making (then) minimum wage working under 40 hours a week why would they think they could afford the loans they were taking out?

The answer is they didn't care. As quickly as they could they packaged those sketchy loans into mortgage backed securities and sold them, recovering whatever skin they had in the game and collecting fees. Lather rinse and repeat

 

[dudley0]

The answer is they didn't care. As quickly as they could they packaged those sketchy loans into mortgage backed securities and sold them, recovering whatever skin they had in the game and collecting fees. Lather rinse and repeat

I was speaking more about the people buying the houses. There is a fine line between being an idiot and allowing an idiot to do idiotic things.

Not sure which I made more money on, people losing houses because of stupid loans or people losing houses because they watched (and believed) HGTV.

 

[MCgrease08]

If it's tied to PMI, then don't get a loan with PMI. I would think most people with high credit scores don't pay PMI to begin with.

My understanding is that PMI isn't tied to a credit score, only to the amount put down on the purchase price. If a buyer puts down more than 20% then there is no PMI. But I've been wrong before and will be again, so I'm sure there is someone with a better understanding than me.

ETA: this was addressed well up thread.

A few other comments:

I heard this rule only applies to mortgages longer than 15 years. All the more reason to never take out anything other than a fixed rate 15-year mortgage with a payment less than 25% of your monthly take home pay.

I used to have an "exceptional" FICO score above 800 back where I used to care about such things. Unfortunately, I was broke back then.

Now I'm not broke, and my credit score has disappeared. It's "indeterminable."

I can tell you which position I prefer, and it ain't the one with the good credit score.

 

[woowoo2]

Indiana is doing away with the mortgage exemption and adding to the homestead.

Help me understand please.
I thought the Homestead exemption went away when you paid off your home?
Is that not the case?

 

[MCgrease08]

My credit is frozen with all three companies for around 8 years now, and I only unfreeze when I need to, and that is Experian only.
I haven't had a credit checked in over a year. I've recovered from that a long time ago.
Nothing new other than paying it down more.
I payed it down from around 12% to 7% usage.
I figured that should improve it not bring it down.

A credit score is essentially your "I love debt score" and shows how much you like playing kissy face with the bank. Paying down debt lowers your score because the calculation rewards you for borrowing lots of money.

Stop playing the game and stop borrowing money. Then you won't ever worry about your score again.

 

[phylodog]

It appears there may be the possibility of blurred lines on what actually happened. As with most things politically motivated you can believe the fairy tale you're being told or spend the time to dig and research to figure out what is really going on.

Considering the "accomplishments" of this administration over the past three years, figuring in for their constant lies and consistent commitment to perverting everything they can get their hands on while making every decision with their goal of destroying the country in mind.... I think I'll choose to comfortably assume this is simply another dent in the framework of what was once supposed to be a free country based on providing equal opportunities. I'm quite comfortable in the assumption that this sucks, right up there with every single other decision these freedom hating totalitarian serpents have made.

 

[woowoo2]

I went ahead and filed again, we paid off our home awhile back and I am concerned that I lost the exemption in the process.

Homestead exemption form:

Deductions Property Tax

www.in.gov

 

[Flash-hider]

This administration are nothing but a bunch of IDIOTS

Please don't arbitrarily elevate their IQ classification.

 

[1DOWN4UP]

I always considered the fico score as a measurement. 600 is equal to 6 inches.700 is 7 inches and so on. It is equal to how many inches of your tongue you are willing to stick up your bankers butt.

 

[snorko]

Help me understand please.
I thought the Homestead exemption went away when you paid off your home?
Is that not the case?

IIRC the homestead exemption reduces the effective assessment on your primary residence. it remains in effect as long as you occupy your home. So if you own two identically assessed homes, but one is a vacation home, the taxes will be different. If you own a third home but rent it out, its taxes will be higher still.

The mortgage exemption goes away if you have no mortgage/pay off your loan. Note, if you refinance you should refile the exemption.

 

[MCgrease08]

I'm pretty anti-Dave Ramsey. Other than helping people get out of consumer debt, I think his financial advice sucks.

I'll state up front that I drink the Ramsey Kool-Aid and follow his plan.

That out of the way, Dave Ramsey and his Baby Steps has created more millionaires than anyone else walking the earth. There is no one else that has helped more people build wealth than him.

You can disagree with his approach, but I'm not sure how you can say his "financial advice sucks" based on the results people get by following it.

If you could get a 3% rate (a few years back) and put 5% down, why wouldn’t you?

You could easily take that extra money you would have put down into some kind of investment vehicle earning 5%+, thus getting a 2%+ arbitrage on your money.

If someone could get a HELOC at 3% would you also recommend they borrow against it to invest?

The Ramsey team conducted the largest study on millionaires ever done in North America, surveying more than 10,000 of them. There was no data that showed people get rich by borrowing lots of money on low rate mortgages and investing the difference. None.

I'm sure some have done it, but it was not a common trend line among people that built wealth. In fact, the data shows the opposite. People build wealth by paying off their mortgages and freeing up their income to invest.

Plus when you pay off your house, you lose the mortgage tax credit.

The mortgage tax credit is trading a dollar for a quarter. Why would anyone keep a mortgage around just so they could pay $10,000 to their mortgage company to get a $2,500 credit? That math doesn't add up on that.

Not to mention that in order to claim the mortgage tax credit you'd have to itemize deductions rather than taking the standard deduction, which almost no one does anymore since the amount doubled. Approximately 9 out of 10 people were expected to take the standard deduction on their 2022 returns.

Standard Deductions for 2023 and 2024 Tax Returns, and Extra Benefits for People Over 65

Each year when you fill out your federal income tax return, you can either take the standard deduction or itemize deductions to reduce your taxable income. The overwhelming majority of taxpayers claim the standard deduction, because due to changes in tax law, few people find it worthwhile to itemize

www.forbes.com

 

[cobber]

Sounds like it's time to short the housing market again.

What do we suppose our ruling class is doing right at this moment?

 

[Ingomike]

My understanding is that PMI isn't tied to a credit score,

I believe the amount of the upfront fee and monthly fee for PMI are affected by the credit score. The fees for FHA are not affected by credit score other than qualifying for the loan itself.