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[Stuart D Gathman]

On Sat, 29 Apr 2023, Arturo Davila Andino wrote:

> None of the links support your "good  (>680) credit scores pay a 1.5%
> penalty" hypothesis.

Newsweek: Sandra Thompson, FHFA director defended the new fees,
"Some mistakenly assume that the prior pricing framework was somehow
perfectly calibrated to risk—despite many years passing since that
framework was reviewed comprehensively. The fees associated with a
borrower's credit score and down payment will now be better aligned with
the expected long-term financial performance of those mortgages relative
to their risks."

ABCNews: "Beginning May 1, upfront fees for loans backed by Fannie Mae
and Freddie Mac will be adjusted because of changes in the Loan Level
Price Adjustments (LLPAs). Those fees are based on things including the
borrower's credit score, size of the down payment, type of home and
more. In some cases, people with better credit scores may pay more in
fees, while those with lower credit scores will pay less."

also from ABC, a caveat I missed in my "not this again" mood:
"The new matrix everyone is trying to decipher is only part of the
equation," Ostrowski told ABC News. "The other part is mortgage
insurance: Borrowers who put less than 20% down have to pay mortgage
insurance that more than offsets the lower upfront fee. So there's no
financial advantage to the borrower to put down less than 20%."

USA Today offers an example for $300K (what home is that cheap
anymore?):

For example, if you have a score of 659 and are borrowing 75% of the
home's value, you'll pay a fee equal to 1.5% of the loan balance. Before
these changes, you would have paid a 2.75% fee. On a hypothetical
$300,000 loan, that's a difference of $3,750 in closing costs.

On the other end, if you have a credit score of 740 or higher, you would
have paid a 0.25% fee on a loan for 75% of your home value before May 1.
After that date, you could pay as much as 0.375%.