New Mortgage Challenges for Bloomfield Hill Home Buyers

It is spring of 2023 and there are a lot of Bloomfield Hills home buyers who will be impacted by a new set of Loan Level Pricing Adjustments (LLPA) that are hitting the mortgage business right now. Here is some background: One of the reasons this country has such a great ownership rate is that we generally have low interest rates for home loans. A reason for that is the standardization of loans by some giant pseudo-government entities, primarily FannieMae and FreddieMac. About 80% of home loans meet standard guidelines, and it allows for simple exchange of loans by institutional investors. Loans that conform to these standards are referred to as "conforming loans". Again, this is nearly 80% of home loans. As you probably know, not everyone gets the same rate when they buy a home. That is because of the LLPA. These adjustments compensate for variations in each loan, the size of the loan, the type of home, what the home is used for, the credit score of the borrowers, th...