New Biden administration mortgage rules that could result in highly qualified borrowers scores paying higher fees is drawing comparisons to the 2008 financial crisis.
Manhattan broker and Americas Agent Brian Lewis argues the Biden administration is putting one more boot on our neck.mortgage rules that could increase fees for borrowers with good credit in order to offset costs for less qualified buyers went into effect Monday have spawned memories of the 2008 financial crisis that was ignited in large part by the collapse of subprime mortgages.
Those fees would be designed to help alleviate the risk of lending to riskier borrowers, who often face difficulty qualifying for favorable terms that would allow them toPlans to expand the ability of lower-income borrowers to qualify for mortgages have been tried before, including in the lead up to the 2008 financial crisis.
"That is exactly what happened when it turned into the subprime mortgage crisis," Stern said. "It's creating a system where you can't rely on the risk numbers, you can't make any real predictions about what's going on."FHFA Director Sandra Thompson attempted to alleviate fears over the new rules in a statement last week, saying the new fees will not "represent pure decreases for high-risk borrowers or pure increases for low-risk borrowers.
Reached for comment on the new rules, an FHFA spokesperson also stressed that the agency is "independent from the White House." The FHFA spokesperson also told Fox News Digital the new policy is not a rule, however, the spokesperson directed Fox News Digital toStern argued such regulatory interventions in the market by agencies such as FHFA risks further damage, regardless of the intentions of the regulation.
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