Page 12 - June 2023 Issue.indd

Make no mistake, this action is the result Biden! There are a lot of high-income The loan could have been originated as
of a larger political agenda (call it what individuals with low credit scores. early as late February to early March. It
you like) where one group of people is Believe me! LLPA’s were implemented was not like you saw a loan fee increase
pitted against another group of people in order to compensate lenders for of .375% in May from the pricing on

for the benefit of those less fortunate at the higher likelihood of a borrower April 30.
the expense of those more fortunate. In defaulting. Data has shown that those
Borrowers with lower credit scores are
this case it is credit scores and the cost who manage credit less appropriately
paying for their transgression potentially
of credit through Loan Level Pricing than those who do are more likely to
thousands of dollars more at settlement
Adjustments (LLPA’s). be late on their payments and possibly
to keep the same rate as higher score
default.
It could just as easily be liberal’s borrowers, or they will pay a higher
vs conservatives, Republicans vs All of the sudden, credit scores have interest rate and payment to off set the
Democrats, right to lifer’s vs abortion become another column on the “equity” additional costs.
rights advocates, gun control vs gun score card. The net result is that very I predict that Fannie and Freddie will
rights, student loan borrowers vs the few if any lower score credit borrowers see very little if any increase in volume
no “free lunchers”. Call them what you will benefit because in most cases there of loans to borrowers with credit scores

will, and pick any issue. We are in a are better alternatives. Conventional below 660. The unintended consequence

never-ending spiral of “fi tting in” with loans through Fannie and Freddie will of more revenue is a good one for Fannie
our beliefs and believing so strongly we be the last program they consider if and Freddie.
consider those with opposing opinions they consider it at all. Personally, I never
to be the enemy without reason. consider or recommend a Conventional Mr. Rowe is Vice President/Lending for
loan to a person with low credit scores. Bay Capital Mortgage Corp. with offi ces
The LLPA adjustments serve a political

agenda pure and simple. Under the Although this change was made eff ective in Easton and Annapolis. He has lived in
guise of “equitable” access to mortgage on loans delivered to the GSE’s after Caroline for his entire life and supports
credit, the administration is assuming May 1, this change has been in lenders the county by volunteering in a variety of
that those with low credit scores have pricing for 60-90 days in anticipation ways. He currently lives near Greensboro

lower income and are being penalized of its effective date. Loans are delivered with his wife Jeanne and daughter Kelsey.

because they do. Newsflash President about four weeks after they have closed.
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