Clueless English majors draw up asinine mortgage rules. [The Rude Awakening] April 24, 2023 [WEBSITE]( | [UNSUBSCRIBE]( In Bizzaro World, Good Credit Means a Higher Rate. - Fannie Mae and Freddie Mac, which shouldn’t exist at all, released a new Loan–Level Price Adjustment (LLPA) Matrix for loans sold to them after May 1, 2023.
- If you have a credit score of 680 or higher, the fee will amount to roughly $40 per month on a home loan of $400,000.
- Homebuyers who make down payments of 15% - 20% will be hit with the largest fees. [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( [Click here to learn more]( I’ve just released an urgent message with my thoughts. But more importantly, I’m offering to send you an [exact playbook]( on what I see playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [Click Here To Learn More]( [Sean Ring] SEAN
RING Good morning from a sunny Asti, where everyone has the day off, but yours truly! Tomorrow is Liberation Day (Festa della Liberazione). It’s held in honor of April 25, 1945, when Italians rose to protest against the Fascists. Benito Mussolini was executed three days later. Since Liberation Day inconveniently falls on a Tuesday this year, the Italian government decided to “bridge” the weekend and the holiday by giving us all an extra day off. I often crack up about the sheer number of public holidays here. I told Pam we needed to buy a calendar to keep track. I’ve walked Micah to school on days off like a bonehead. But days off aren’t the worst thing in the world. It keeps everyone young. Of course, buying a house here does the complete opposite. If I weren’t bald, my hair would have fallen out during this process. Pam found the perfect house for us. It’s beautiful. But as I wade through the molasses of Italian bureaucracy, getting our paperwork and financial proof together has been a nightmare. (That’s one of the few disadvantages of living all over the world.) My good friend and publisher, Matt Insley, has been a gem in helping me out with updated contracts and other sundries. But he said something the other day I didn’t quite understand. As I complained about Italy’s homebuying process, Matt said: “You'd be in bad shape over here, too.... if you happen to have the curse of GOOD credit.” Now what Matt pays me buys plenty of pasta here in Italy. And I laughed along without getting exactly what he was talking about. Then I stupidly picked up the newspapers. There aren’t enough expletives in Philosopher-Truck Driver John Ring’s verbose but as yet unwritten “The Truck Driver’s Guide to Communicating Your True Feelings (Sign Language Included)” to cover the sheer insanity of this new rule. The LLPA Is Economic Lunacy I’m all for people owning a home. But first, no matter how often you watch It’s a Wonderful Life, no one has a “right” to own a home. And second, you need to pay for your house yourself. Or inherit it. Yes, inheritance is good and should be appropriately wielded every generation. Remember, the same people who tell you inheritance is evil are the same people trying to break up the family structure altogether. Now, let’s get to this fresh economic hell. According to [The New York Post]( Fannie Mae and Freddie Mac will enact changes to fees known as loan-level price adjustments (LLPAs) on May 1 that will affect mortgages originating at private banks nationwide, from Wells Fargo to JPMorgan Chase, effectively tweaking interest rates paid by the vast majority of homebuyers. The result, according to industry pros: pricier monthly mortgage payments for most homebuyers — an ugly surprise for those who worked for years to build their credit, only to face higher costs than they expected as part of a housing affordability push by the US Federal Housing Finance Agency. Obviously, no one in Joke Biden’s government knows a damn thing about economics or real estate. But what’s more immediately troubling is this: to save for a down payment, you’ve got to eat the eye-watering inflation the Biden administration has served up since he was elected. That is, it’s not cheap to save. It’s an expensive proposition, purposely orchestrated by the government and their central bank minions, who kept their foot on the yield curve for far too long. In essence, savers get hit twice. First, they don’t earn enough interest because central banks prevent interest rates from rising to their unencumbered level. Second, those low interest rates lead to higher asset valuations, especially on houses. And now savers will get hit this third time to subsidize those who were more prolifigate in their spending. It reminds me of the Ants and Grasshopper fable from Aesop. The Grasshopper made music all summer and didn’t put any food aside. He asked the ants for food, and the ants told him to “go dance.” It’s a lovely little fable that teaches children to prepare and that no one will rescue them (which mirrors the real world exactly). Oddly enough, I noted that when Micah watched a video version of this fable on YouTube, the ants invited the grasshopper into the house and fed him. Even Aesop isn’t safe from the damn hipsters… and the USG isn’t safe from them, either! [[CHART] Could Inflation Hit 20%+ In 2023?]( [Click here to learn more]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [Click Here To Learn More]( Incentives and Scarcity So if you try to put down 15-20%, you will get hit. If you have a high credit score, you will get hit. Is this a positive or negative for the housing market? A massive negative. When people make big-ticket purchases, the one thing they want to know is, “Did I make the best deal I could?” Now, there will be plenty of hemming and hawing to determine if a buyer can make a better deal. And it’s not like the pros are all for this: Real estate expert and Madison Ventures+ managing director [Mitch Roschelle said]( If you have a high credit score, and 680 is a good credit score, you have to pay more. And we're talking about real money. This could be $100 a month more, depending on the size of your loan. So it makes no sense. And by the way, this isn't about first-time homebuyers. There's nothing in this rule that says it applies to first-time homebuyers. It applies to anybody borrowing money that's insured by FHA. It's madness. David Stevens, a former head of the Mortgage Bankers Association, [said the new fees]( …will create extreme confusion as we enter the traditional spring home purchase season. This confusing approach won’t work and more importantly, couldn’t come at a worse time for an industry struggling to get back on its feet after these past 12 months. To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders. Strategic Wealth Partners CEO Mark Tepper [called the move “socialism for homeowners”]( and added: That's not the way you grow as a country, as an economy, by essentially saying, “Hey, if you spent recklessly, you lived above your means and you stopped making your payments on time, have no fear. Someone who's done it the right way is going to pay for you.” That's not what capitalism is all about, and it puts us in a situation where there are no consequences when you make bad decisions. Wrap Up Dopey Joe’s administration has put its heads together and devised yet another failed policy. Sure, it will fail… because it disobeys the fundamental laws of finance and economics. The higher the risk, the higher the expected return. And vice-versa. Low-risk house buyers aren’t going to tolerate this. [Mish Shedlock]( expects lawsuits. I say, “Sue the bastards!” Have a great week ahead. All the best, [Sean Ring] Sean Ring
Editor, Rude Awakening P.S. We here at Paradigm know how our government is actively working against us, as evidenced above. As we struggle to make ends meet in today’s world of high-interest rates and inflation that just won’t cool down to acceptable levels, we really have two choices to stretch your budget… Add more income or cut spending. While there is only so much spending we can cut, dramatically increasing our income is essential. And it’s more fun, too. That’s why Income Matrix Trades are important to know about. And next week, there is a “Banker” that will reveal how these trades work. Some of these trades have made 57% in 4 days... 85% in 6 days... even up to 166% in 2 days. Which quickly add up to $6,429… $10,617… and even $13,204… So, stay tuned next week for more information on how you can capitalize on short-term Income Matrix Trades as “The Banker” reveals everything… In Case You Missed It⦠Zach Scheidt Says Something's About to Break (Again) [Sean Ring] SEAN
RING Greetings from an overcast morning in Northern Italy! Good friend and colleague Zach Scheidt will launch a new service shortly. I’ll have more details for you soon. In the meantime, Zach kindly wrote this piece that’s important for you to read… especially if you like investing in bonds. Remember, Silicon Valley Bank went under because it didn’t manage its interest rate risk correctly. (In bond world, interest rate risk is price risk.) And that was on T-bonds! But if Silly Valley’s non-existent risk management team had read this piece, the bank would’ve remained solvent. Read on for some excellent advice on managing your bond risk correctly. And I’ll see you tomorrow. All the best, [Sean Ring] Sean Ring
Editor, Rude Awakening [Ex-CIA and Pentagon Advisor: âThis is How Biden will End the Republicâ]( [Click here to learn more]( Former advisor to CIA and Pentagon Jim Rickards just got his hands on a Congressional document that he believes details Biden’s plan to end the Republic. [He’s urging you to take these five steps now…]( Because if you don’t prepare, you could soon lose your life savings, god-given rights and your constitutional freedoms. [Click here now]( because we can almost guarantee this expose will be censored by Big Tech and the corrupt media. [Click Here To Learn More]( Something's About to Break (Again) [Zach Scheidt] ZACH
SCHEIDT There's a battle raging in the market right now. But not the market you're probably watching... No, I'm not talking about the new banking crisis, company earnings, or even the stock market. One of the safest investments you could possibly make — an investment that millions of retirees are currently holding — is about to be a casualty of this high-stakes battle. Today, I want to show you what's going on behind the scenes and make sure you're protected from what could be a catastrophe for your retirement. A Tale of Two Bond Markets We all know that the Federal Reserve has been hiking interest rates. Higher rates are the Fed's only effective weapon against inflation. At the last Fed meeting, Jerome Powell and his colleagues raised interest rates by another 0.25% and indicated that the Fed would keep rates high until inflation is under control. Here's a chart of the Federal Funds rate, a good proxy for short-term market interest rates. [SJN] The Fed keeping rates high to fight inflation is one side of the battle. On the other side, we've got Wall Street traders who are looking farther into the future. These traders expect the U.S. economy to enter a recession soon. When this happens, Wall Street believes the Fed will flinch — you've probably heard people talk about the Fed's upcoming pivot — and allow interest rates to move lower. Here's a chart of long-term interest rates as measured by the 10-year U.S. Treasury yield. [SJN] Please notice two things in the chart above... First, the trend has been rangebound over the past several months. And since the beginning of March, long-term rates have actually pulled back even though the Fed was tightening. By keeping long-term rates low, Wall Street traders are effectively calling the Fed's bluff and expecting the Fed to cut rates quickly once the economy enters a recession. But if you've been paying attention to Powell's statements and actions, you should know that he’s not bluffing. And this conflict sets up a major risk for your retirement. What Happens When Powell Shows His Hand? In poker, there's a showdown point in each hand that typically happens when one player makes a bet, another player calls that bet, and then both players show their hands to see who wins. As Chair of the Federal Reserve, Powell is essentially making a bet by telling the market he will keep rates higher for longer. And by keeping long-term interest rates lower, the market is essentially calling that bet and telling Powell to prove it by keeping rates high. Here's the thing... Powell has plenty of resolve to keep rates high. And the Chair has carefully studied history, specifically the period of high inflation we had back in the 1970s. Over and over, Powell has referenced this period, telling the American public that he will not repeat the mistake of cutting rates too quickly and allowing inflation to return. Whether you agree with him or not, it's clear that the Fed Chair has absolutely no intention of wavering from this stance. So as investors, we have to wonder what will happen to 10-year rates if we enter a recession and Powell does notimmediately cut rates. Wall Street is in for a big surprise and will have to adjust its stance on long-term interest rates. Here's why that should matter to you and your retirement... When long-term interest rates are revised higher, bond prices will trade lower. If you're holding long-term Treasury bonds in your retirement account, those bonds will be worth less, possibly for years to come. Protect Yourself from Long-Term Bond Risk The risk of lower long-term bond prices frustrates me to no end. I hate to see retirees make what’s considered a safe investment, only to get hurt by Wall Street's brinksmanship. Yes, if you hold these long-term bonds until they mature in 10 or 20 years, you'll get your money back and the interest you've been promised along the way. But there are two major drawbacks to this approach. First, if you need the money in the interim, you'll be out of luck. You'll have to sell your bonds at a lower price and realize a loss on your investment. Second, while you're holding your long-term bonds and waiting to get your money back, inflation will continue to degrade the value of the money you will eventually receive. So in 10 or 20 years, that $1,000 per bond may not be worth all that much! Instead of holding bonds and waiting for Powell to show his poker hand, here's what I suggest. Sell your long-term Treasury bonds at what is currently a relatively attractive price. Then use the cash to buy short-term treasuries that mature in 6 months, 12 months, or 18 months. You could use bank CDs as well, as long as you don't have more than $250,000 at any one bank. When those investments mature, chances are good that long-term interest rates will be higher, which allows you to buy bonds at a lower price and get better long-term returns. Today's interest rate battle requires you to take action to protect your wealth. I hope you'll adjust your retirement savings so you're not caught in the crossfire! Here's to living a Rich Retirement, [Zach Scheidt] Zach Scheidt [Paradigm]( ☰ ⊗
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