The actual story from the mortgage industry.
https://www.mortgagenewsdaily.com/markets/mortgage-rates-04212023
As expected, the talking points spinning in the media are not exactly true.
From the website quoted above-
So a low credit borrower isn't paying less than a high credit borrower? The gap between what they pay is just smaller than it was?
YES! Again, all value judgements and political commentary aside, the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores, but there's no scenario where someone with lower credit will have a lower fee. In other words, don't go skipping those credit card payments in the hopes of getting a lower rate.
As you can now plainly see, if you have a score of 640, you'll be paying significantly more than if you had a 740. Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That's a difference of 1.375%, or just over $4000 on a $300k mortgage. This is almost HALF the previous difference, and that's certainly a big change.
Yes, it's a big change, so why is the government doing this to people with higher credit?!
Fannie and Freddie technically have a "mission" to promote affordable home ownership. Here is the statement on the topic by their regulator, the FHFA:
FHFA Announces Updates to the Enterprises’ Single-Family Pricing Framework.
Note in the first two tables that there is more of an improvement for the lower FICO rows on PURCHASES (i.e. home ownership vs refis).
Any other misconstrued news I need to know about?
Yes, actually. While not as viral as the LLPA stuff, there has been a fair amount of press on a new 40yr FHA mortgage. THERE IS NO NEW 40yr FHA LOAN! Lenders who collect payments on FHA loans have a new option to offer loan modifications with terms of 40 years to borrowers who are unable to pay their existing FHA loans.