Part 2,, Biden punishes good-credit homebuyers

@no1marauder said
If right wingers want to openly support the abolition of the FHA, which has made possible 40 million extra American homeowners, they should explicitly say so. Maintaining the present rate structure, however, which is punitive towards those the program is most meant to assist is counter to its basic goals.

Who cares what the right wingers want, I'm arguing from a Libertarian, free market, capitalist perspective. Republicans have been on another road for decades.

@wajoma said
The point remains, those with low credit scores do not subsidise those with high credit scores, they are subsidising the loses that come from loaning to low credit score borrowers. When the goobermint steps in and puts artificial (as opposed to the natural tendencies of the free market) controls in place you may find the opposite to be true, that the needle swings the other w ...[text shortened]... safe borrowers with high credit score are subsidising the losers who can't maintain their mortgages.

You don't understand the program and I'm too bored with right wing ignorance to explain it to you in detail. The short version is that FHA mortgages are for those who can't get mortgages under the usual guidelines of banks and lending institutions. Charging those who are most in need of the program higher fees and those least in need lesser ones is counterproductive to the goals of the program. And complaining that changes in the fee structure that lessen, but do not reverse this feature, amount to having the higher fee payers "subsidize" the lower fee payers is manifestly absurd.

@wajoma said
Who cares what the right wingers want, I'm arguing from a Libertarian, free market, capitalist perspective. Republicans have been on another road for decades.

You're off-topic then. The thread isn't about whether the FHA should exist, but whether changes to its fee structure which lessen the difference between what low income, low credit score lenders pay and what others pay amount to the former "subsidizing" the latter as right wing propaganda sources claim.

@no1marauder said
You don't understand the program and I'm too bored with right wing ignorance to explain it to you in detail. The short version is that FHA mortgages are for those who can't get mortgages under the usual guidelines of banks and lending institutions. Charging those who are most in need of the program higher fees and those least in need lesser ones is counterproductive to th ...[text shortened]... ature, amount to having the higher fee payers "subsidize" the lower fee payers is manifestly absurd.

I wasn't arguing the goals of the program, I don't doubt the goal of that buratcracy is to distort the free-market, I was making the point that low credit scoring borrowers need to pay more, not to subsidise safe borrowers but to pay for loan defaulters which are more commonly low credit scoring borrowers, the risk of lending to them being what defines 'low credit score'.

Not saying anything about right wingers, republicans, the FHA. Merely making that immutable point. Those with low credit scores belong to a group known for risk and as part of that group they are the ones who have to assume some of the risk of the group they belong to. Anything other than that amounts to safe borrowers subsidising the high risk borrowers i.e. those with high credit scores covering the risk of those with low credit scores.

The very opposite of your previous statement which you keep repeating:

"lower income and credit score FHA mortgagors have been subsidizing higher income and credit score mortgagors for a long time"

...and as such, since it is in response to you, it remains on topic.

No1:

"You're off-topic then."

Edit: That a goobermint department has to force artificial controls merely reinforces this fact.

@no1marauder said
You're a brainwashed idiot and this thread is a perfect example of why it is useless to "debate" right wingers. You're either out and out liars like Earl or simpletons like yourself.

In the prior thread, I cited the article YOU used as follows:

"Here's what the Reason article you cited to states:

"The effective penalty for having a credit score under 680 is now s ...[text shortened]... this is "Marxism" or some such and are sooooooooooooooo stupid you believe it is of no consequence.

I do not disagree with these obvious points, and I have sat at many a closing table.
But today,, now,,let us look at this link and you tell me how we should view this 'scheme' as it has been called. Either you, or they, are wrong.

https://www.newsweek.com/biden-raises-costs-homebuyers-good-credit-help-risky-borrowers-1795700

@wajoma saidborrowers, the risk of lending to them being what defines 'low credit score'.

Those with low credit scores belong to a group known for risk and as part of that group they are the ones who have to assume some of the risk of the group they belong to.


"You're off-topic then."

Edit: That a goobermint department has to force artificial controls merely reinforces this fact.

A great point, .....the concept of risk flies right in the face of liberals, they cannot deal with it, nor apply it to circumstances.
Let us see if Marauder can respond in kind to your post.

Thumb up from Joe

@wajoma said
I wasn't arguing the goals of the program, I don't doubt the goal of that buratcracy is to distort the free-market, I was making the point that low credit scoring borrowers need to pay more, not to subsidise safe borrowers but to pay for loan defaulters which are more commonly low credit scoring borrowers, the risk of lending to them being what defines 'low credit score'.

N ...[text shortened]...

Edit: That a goobermint department has to force artificial controls merely reinforces this fact.

Forcing lower income mortgage holders (and low credit scores are correlated with income) to pay higher fees is contrary to the very goals of the FHA and should be ended. Nor does reducing their disposable income make any sense if you want to assure they pay their mortgages. To the extent the present FHA plan reduces the regressive disparity between what those with low credit scores pay and what those with higher credit scores pay (who are not really the target of the program), it should be commended.

The FHA program has been a smashing success and has fundamentally changed the housing market, freeing it from the shackles of foolish laissez faire ideology:

"The FHA’s primary function was to insure home mortgage loans made by banks and other private lenders, thereby encouraging them to make more loans to prospective home buyers. The FHA’s approach was designed to attract support from interest groups such as the real-estate and banking industries, which were historically opposed to federal intervention in the housing arena. Prior to the FHA, balloon mortgages (home loans with large payments due at the end of the loan period) were the norm, and prospective home buyers were required to put down 30 to 50 percent of the cost of a house in order to secure a loan. However, FHA-secured loans introduced the low-down-payment home mortgage, which reduced the amount of money needed up front to as low as 10 percent. The agency also extended the repayment period of home mortgages from 5–10 years to 20–30 years. The resulting reductions in monthly mortgage payments helped to prevent foreclosures, often made buying a home cheaper than renting, and allowed families with stable but modest incomes to qualify for a home mortgage. In addition, because government-backed loans involved less risk for lenders, interest rates on mortgages went down."

https://www.britannica.com/topic/Federal-Housing-Administration

As a result, home ownership rates rose from 44% to a situation now where "2-in-3 householders in the United States owned their own homes." https://www.census.gov/data/tables/time-series/dec/coh-owner.html

So because of such governmental policies, tens of millions of Americans own their own homes rather than renting. It would seem someone who claims to support "liberty" would applaud that even if he was forced to admit that simplistic adherence to laissez faire principles would have miserably failed to achieve such a result.

@averagejoe1 said
A great point, .....the concept of risk flies right in the face of liberals, they cannot deal with it, nor apply it to circumstances.
Let us see if Marauder can respond in kind to your post.

Thumb up from Joe

It is the nature of the FHA program that it accepts higher levels of risk than private lenders. This has not stopped it from amassing almost $150 billion in the Mutual Mortgage Insurance Fund. https://www.hud.gov/press/press_releases_media_advisories/HUD_No_22_235#:~:text=As%20of%20September%2030%2C%202022%2C%20FHA%E2%80%99s%20serious%20delinquency,the%20peak%20of%2011.90%25%20experienced%20in%20November%202020.

Even with such added risk, the level of serious delinquencies remains low even with the economic uncertainty of the last few years - it was at 4.77% as of September 30, 2022 (from the link above).

The program is a smashing success and during a time when home sales have slipped largely due to the interest rate increases of the Fed, it makes sense to cut the fees paid by the borrowers who are the primary target of FHA loans i.e. those with lower income and thus lower credit scores. This will better enable them to afford to purchase a home; if Wajoma was aware of economic theory he'd know that when demand is low, a seller often has to reduce his price. This is essentially what the FHA is doing in order to entice more buyers into the market.

@wajoma said
Who cares what the right wingers want, I'm arguing from a Libertarian, free market, capitalist perspective. Republicans have been on another road for decades.

Right wing "Libertarian, free market, capitalist" ideology failed in the US housing market.

Government intervention worked greatly increasing the percentage of Americans who own their own homes.

This is a historical truth whether you have the courage to admit it or not.

@no1marauder said
Right wing "Libertarian, free market, capitalist" ideology failed in the US housing market.

Government intervention worked greatly increasing the percentage of Americans who own their own homes.

This is a historical truth whether you have the courage to admit it or not.

I know you write as a communist, so you cannot see past a 'plantation' society. Tell us how many countries has been reeeeeaaal successful over the last 250 years. And countires like Netherlands have been around for, say' ten thousand years '. Did we fare best under capitalism?

@no1marauder said
Right wing "Libertarian, free market, capitalist" ideology failed in the US housing market.

Government intervention worked greatly increasing the percentage of Americans who own their own homes.

This is a historical truth whether you have the courage to admit it or not.

It is creepy to text with a Marxist, I gotta tell you.
Anti-libertarian , anti-free market, anti-capitalist.

Guys what have we got here. A clear example of this very hour? He writes 4 posts in a row, which all have One Common Thread........
Government Control. Let's feed everybody, get them in line, check their papers

@averagejoe1 said
I know you write as a communist, so you cannot see past a 'plantation' society. Tell us how many countries has been reeeeeaaal successful over the last 250 years. And countires like Netherlands have been around for, say' ten thousand years '. Did we fare best under capitalism?

I forgot this "Communist" program which also helped lead to the increase in homeownership:

"With the help of the GI Bill, veterans were able to purchase homes at much lower interest rates than the average person. This helped to increase home ownership for veterans and those who could not afford a home before the GI Bill was passed."

https://yesweadvice.com/home/why-did-home-ownership-increased-after-world-war-ii-apex/

Of course this is outrageous; just because you helped save the world from the Nazis and Japanese militarists doesn't mean you should avoid the iron clad rules of laissez fare capitalism. It was none of the government's business to help these ex-soldiers and they should have fended for themselves - I'm sure if they just "worked harder" they would have easily become rich.

Damn government control! Those ex-GI's would have clearly had more "liberty" remaining uneducated and paying rent to their betters.

@no1marauder said
I forgot this "Communist" program which also helped lead to the increase in homeownership:

"With the help of the GI Bill, veterans were able to purchase homes at much lower interest rates than the average person. This helped to increase home ownership for veterans and those who could not afford a home before the GI Bill was passed."

https://yesweadvice.com/home/why- ...[text shortened]... ex-GI's would have clearly had more "liberty" remaining uneducated and paying rent to their betters.

Is it the government’s business about the personal private plans and resources of a guy making decisions to raise his family? ‘ “I think I will work hard and save money for a down payment on a house.’”
What has the giveaway (GIMME IT) govt got to do with it? Shav says they have a right to housing.😵‍💫 Yes, VA and FHA loans are great. They accomplish their goals. Let us set aside those wonderful programs, and will you please tell us what the hell u are talking about?
Marauder here makes random emotional comments, ignoring the existence of VA and FH loans. Please tell us what other govt assistance you want.

PS. Yes,people who work hard can get rich. Don’t get you there.

@averagejoe1 said
Is it the government’s business about the personal private plans and resources of a guy making decisions to raise his family? ‘ “I think I will work hard and save money for a down payment on a house.’”
What has the giveaway (GIMME IT) govt got to do with it? Shav says they have a right to housing.😵‍💫 Yes, VA and FHA loans are great. They accomplish their goals. Let u ...[text shortened]... other govt assistance you want.

PS. Yes,people who work hard can get rich. Don’t get you there.

IF there had been a Fox News in 1944 and IF you and Earl had been around to slavishly believe every word it said there probably would have been a headline like:

"FDR's GI Bill punishes good-credit homebuyers".

And you would have believed it.

@no1marauder said
IF there had been a Fox News in 1944 and IF you and Earl had been around to slavishly believe every word it said there probably would have been a headline like:

"FDR's GI Bill punishes good-credit homebuyers".

And you would have believed it.

I would believe it if it were fact.
I believe today what is fact.
So I don’t get your analogy. The GI Bill did not punish good-credit homebuyers. So, I wouldNOT have believed it.

Wachoo talkin ‘bout?