Remember 15 years ago when our economy fell off a cliff and a lot of good people got hurt?
If you don’t, here’s a refresher: lots of people bought houses for big money, taking out mortgages they couldn’t afford but betting they’d be worth a lot more in a short time. That didn’t pan out so well.
They were encouraged to do that by a banking system that laughed about loans made to “ninjas”…no income, no job, no assets.
Well, Joe Biden’s federal mortgage agencies are bringing that back, with a socialist twist.
Fannie Mae and Freddie Mac announced that, starting less than two weeks from now, interest rates on home loans get a major makeover.
A good credit score usually earns you a lower interest rate and most Americans have that. You’re gonna pay more.
Bad credit usually gets punished with higher interest, which is the marketplace reminding you to pay your bills on time and spend within your means. They pay less.
The higher rate paid by good credit borrowers funds lower rates for those with bad scores. I know it sounds crazy, but it’s a Joe Biden plan. What can you say?
It encourages people who are already not good at paying their bills to borrow big bucks and buy a house.
We already know how this movie ends because we’ve seen it before.