Numerous state officials nationwide are in open revolt against a new Biden Administration rule that would subsidize risky mortgages at the cost of those with more stable mortgages.
State treasuries and other top officials in 27 states urged the Biden Administration to repeal its rule that will use those with good credit scores and good credit history to subsidize those with riskier mortgages and riskier credit scores overall.
Fox Business reports that many state treasuries and top officials say the Biden rule is disastrous for the mortgage market and the economy.
The plan was set in motion a few weeks ago via the Federal Housing Agency (FHFA). The project is set to take effect, beginning nearly immediately, which could cause significant adverse impacts for those with solid credit scores and mortgages.
Fox Business reports that the policy has been criticized by both Republicans and Democrats alike. They all see it as a disturbing move by the Biden Administration to lash out against those with better credit scores in favor of trying to aid people who might not deserve the mortgages that they are attempting to obtain.
The state officials opposing the measure sent a letter to the Biden Administration about this policy. In that letter, they wrote: It is already clear that this new policy will be a disaster, and It amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars. And at a time when the real estate has already slowed considerably due to high interest rates it will further depress home sales.
The letter concludes: We urge you to take immediate action to end this unconscionable policy.
State finance officers suggest that this policy takes the normal process of obtaining a mortgage upside down by punishing those who have worked hard to get a good credit score. It also rewards those who have made the best financial decisions. If this goes forward, this policy could have major negative implications.
The letter also spelled out the following: [T]the policy will take money away from the people who played by the rules and did things right including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment, and Incredibly, those who make down payments of 20 percent or more on their homes will pay the highest fees one of the most backward incentives imaginable.
David Stevens told Fox News, "We can do better programs to help more minorities get into homeownership. This is not the way to do it."
Login