Socialism shows it's ugly face - Now mortgage borrowers with good credit history are penalized

 

Trying to escape socialism, I moved from Russia to the USA. I left Russia end of 90ties, many years ago. 

From my times growing up there, I remember how people who worked hard were punished. How we were pushed equality and equity down the throat. How nobody was allowed to be different or how difficult it was to be successful in an honest way. I remember the constant censorship and widespread corruption. How we had to worship the government and the system and how those who didn't were punished. 

I thought I escaped that. 

In the last few years I started feeling that the socialism starts to catch up to me again.
This week I realized, that it is here for sure. 

It is here in the US.
There was no revolution. It slowly and quietly crept in. And now it is here.

I knew the socialism is here, the day I heard in the news that the diligent savers who apply for mortgages, will be punished and their money will be given to the less responsible.

The news are: Mortgage borrowers with good credit will face higher costs, starting May 1, 2023. 

Per new Loan-Level Price Adjustment (LLPA) Matrix, borrowers with high credit scores will face higher mortgage fees and those with lower credit scores will face lower fees. 

I can understand how people, careful with money, trying to achieve high credit scores for years, feel kicked with a heavy boot in the gut. An additional effect: they don't just hate that boot, they now also start to look negatively at those who will benefit from that, even if those people have nothing to do with initiating this new rule. That is how the population morale goes down. 

The fee increase is significant. 

Someone with a $400,000 loan will pay $40 more per month/$480 more a year and $14,400 more over the time of the mortgage. 

But if your loan is $600,000 that will be higher. $60/$720/$21,600.

And if it is $1,000,000 - then you will be robbed of $100/$1200/$36,000. 

In addition to that there is another "kick":

The fees will be even higher if you have 15-20% down payment. 

And this is still not all. 

In August 2023 there will be an additional "boot kick" coming. 

Those with favorable debt to income ratio will get additional penalty for their responsible behavior.

After hearing it, immediately I had some thoughts that I need to research how to destroy my credit score in the most effective way but without personal financial damage.  But wait...

At this time, it is still not worth it to ruin your credit score for the mortgage application, because luckily, the responsible borrowers, overall, will still pay less. But the difference between lower and higher scores in their fee calculation schedule will be much smaller. So, I am not destroying my credit score yet. 

This is so sad. The socialism is here and I can feel it's breath of death. 

More things will be coming.  Insidiously more and more stupid decisions will be made. Like the new suggestion from the California. 
Three California utility companies (Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric) submitted a joint proposal with the new rate structure. 

The households will pay on a scale based on their household income. 

Households with annual income $28,000-$69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory. 

Households with annual income $69,000-$180,000 would pay $51 a month in Edison territory, $73 a month in SDG&E territory and also $73 a month in PG&E territory. 

Households with annual income above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory. 

I don't know about you but if having a low flat rate for something, makes me to think less about how much I would use. Like lights and air conditioning in hotels. That is human nature and most people would stop caring how much they use. Those who will pay less, will not care and those who will pay more may be resentful and use more too. What do you think? 

So the usage will go up across the board and they will have to increase rates.
I will watch what will happen to them and will put them on my Do not trade list, tickers EIX (Southern California Edison is part of Edison International), PCG and SRE (San Diego Gas & Electric is parts of Sempra).