Except in some rare cases, disaster! In terms of those at the opposite end who have to pay, maybe they will decide to stay and not move. It is a form of taxation without representation and an attempt to buy the vote. What else is new?

more of pushing the middle class out of existence.  Eventually there are only going to be elitist and poor in this country and they are going to realize they have killed the economy to a point of no return when we aren't supporting the nation any longer.

Punishing responsible people to make it easier for those who carelessly rack up credit card debt, are irresponsible with making payments or simply do not qualify for a home loan, is upside down thinking. Nothing good will come from this.

Nothing good or positive. 

I see another massive TRAIN WRECK on the horizon. 

Disaster.  Added fuel to the further decline of our great nation.  Seems like another form of a participation trophy for those who aren't deserving. Pitiful. 

What a sad world that we live in, people should not be rewarded for bad credit, they should receive help to bring their credit score up and become responsible.

Rewarding them won't make them responsible, most likely the opposite will occur, entitlement and recklessness. So the predictable outcome will be defaults and ultimately more difficulty for responsible people to obtain credit.

   In sequence of events?

Bankrupt the Middle Class. 

 Previously "nice" neighborhoods will become blotted with eyesore neglected houses and vacant foreclosures.

 The U.S. Paper Dollar is no longer the dominant "world currency".

 Total Economic Collapse

Maybe this is what our government wants, another real estate market crash!

Remember part of the other crash was those strong loans packaged together with weak loans and the weak loans defaulted... 

Remember when (like car dealerships) if you had a heartbeat, you were able to get a loan. Not matter if you only made $20k a year and purchasing $500k house - looks like the same loan type, just being packaged differently!

It encourages people to be lazy and not take care or pride in their finances.  By stealing from those of us with excellent credit (in the form of artificially higher rates), it penalizes us for being responsible.

We are less of a risk because we have a track record of paying on time and being fiscally responsible.  Those with bad credit have the opposite track record and show to be fiscally irresponsible.  It's not always the case (divorce, etc.), but in the absence of any outside unusual circumstances it is.

The lender I talked to said this isn't going to help those with really bad scores.  No investor is going to lend (at his bank) to anyone below 620, but it will subsidize closing costs and fees to people between 620 and 679 which sucks because it's punishing people with great scores to do it.

We just discussed this a few days ago. You will find all the answers here. Hope that it will not be passed.

https://activerain.com/questions/show/78771/what-are-your-thoughts-on-the-changes-coming-on-may-1--2023-regarding-the-changes-for-loan-level-price-adjustments-

Reinforcing bad habits,  crazy.

Everyday life is a series of consequences.  Intended as well as unintended.  Comical as well as far from funny.  Are you asking for predictions?  

More short sales, more foreclosures, and more bad credit.

It is the seed for another sub-prime disaster. Liberal logic = insanity!🤯  

It's a disincentive to financial responsibility and an assault on those who are financially responsible

Well, it is like bad behavior which if rewarded encourages more of the same. Good behavior, when rewarded, promotes more of the same. However, all must be given second or third chances to come back or get it together. In everyday parlance, it is called hope, the poor man's bread. Starve no one

Think back to 2008 to 2011.  50% or so  of homeowners in PHX area lost their homes to foreclosure or short sale.  Why?  Liar loans they couldn't afford. 

See The Great Recession.

How are you suggesting that they be rewarded?

I do not believe that credit scores are a very good judge of a persons ability to pay, or their character.

I know a few millionaires who either do not fit the mold or refuse to play the game and thus do not have much of a credit score, yet they get things done and continue to produce at a high level.

And I have bought enough foreclosures to know that not all those with adequate credit are really worthy of that much trust.

It's time for another "Boston Tea Party" and maybe another 1776!

Calm down, people. Just because someone has bad credit doesn't mean they are bad people. 

Giving them MORE credit is the issue, and that should be a case by case basis.  

We definitely don't want to go back to the housing crisis of 2007 - which was the the best, most recent example of rewarding those who couldn't afford a home with a home.

Is anyone, anywhere, with bad credit being rewarded?

Assuming this question is in regard to the recent LLPA changes, it's really important to note that those with bad credit are not being rewarded, in any way.  They're just being gouged less than they previously were.  They're still paying a large premium to get a loan compared to 2009 and before, prior to the introduction of LLPAs.

Again, it's Mortgage Welfare...

...plain & simply. Punishing those who DO the right thing and rewarding those who DO NOT. 

It's more knee-jerk decisions, without the use of logical thinking that our government is known for. 

You are referring to the latest proposal for the conventional loans terms? 

I am sure this has to do with the new Biden legislation.  Here are a few thoughts.

The 2008 crash was about banks lending to the fringe borrower.  The borrower whose credit profile kept them from financing a home.  Homeownership actually increased by 10% by taking a portion of the population and now makes it possible to buy a home.

These are also the borrowers that get stressed easily when the economy goes south and have a higher rate of losing their homes.

Everyone wanted to blame it on the greedy banks but we are all responsible.  The public wanted to own homes and the government put pressure on the banks to lend to poorer communities.

Much of the same is going on now.  It is about promoting homeownership in poorer communities.

The next point is slapping a band-aid on it will only lead to disaster.  

Instead of penalizing people who are fiscally responsible and subsidizing those who aren't, we should look at the underlying problem.

Why do these folks have bad credit?  How can that be improved?  How can we encourage them to save more money?  How can we improve their credit profiles?

Fix the problem don't throw a temporary patch on it.

I would argue it depends on what caused the bad credit.  Medical bills?  Long term job loss?  Divorce?  Deceased significant other?

Perhaps crushing bar tabs!  (Just kidding)