A new mortgage rule from the Biden administration that punishes Americans with good credit in favor of financially irresponsible individuals - implemented through the Federal Housing Agency - has arrived.
President Biden's mortgage redistribution plan takes effect today@JeffFlock @cherylcasone @MariaBartiromo @FoxBusiness pic.twitter.com/RItWyKXL6t
— Mornings with Maria (@MorningsMaria) May 1, 2023
If you're looking to buy a home or refinance your loan, you could be facing some new mortgage rules. Critics say the changes will punish borrowers with higher credit scores. @alexistvnews says people with a higher score will still get an "overall better package." pic.twitter.com/UrLaCXRTAt
— ABC News Live (@ABCNewsLive) May 1, 2023
The new rule brings back bad memories of the 2008 housing collapse, which happened as a result of similar policies and the government forcing banks to issue loans to unqualified individuals.
"Basically it is redistribution," Fox Business anchor Maria Bartiromo recently explained. "What you're doing is you are redistributing high risk mortgages and high risk loans."
"This is what we did back in 2005 and 2006 which led to the biggest blow off ever in terms of the housing market and took us down the road of the worst financial recession in a generation," she continued. "Basically what you have going on is larger down payments and credit scores to redistribute risky mortgages so those people with a strong and good credit score actually pay the bill for the mortgages that are much riskier for those people who don't have that kind of credit score."
"REDISTRIBUTION OR YOU COULD CALL IT SOCIALISM" - @MariaBartiromo
— America's Newsroom (@AmericaNewsroom) April 20, 2023
Mortgage fee rules quietly get overhauled, resulting in discounted rates for riskier-credit homebuyers & forcing higher-credit homebuyers to foot the bill...@BillHemmer @DanaPerino pic.twitter.com/VolYIQjXUU
Meanwhile, Republicans on Capitol Hill and in State Capitols across the country are working to reverse the rule. From Fox Business:
State treasurers and other top finance officials from 27 states on Monday urged President Biden to end what they said was his "unconscionable" policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers, and warned Biden’s plan would be a "disaster."
The controversial policy has been attacked by both Republicans and Democrats, including President Obama’s former Federal Housing Administrator. On Monday, financial officers from 27 states weighed in and said it was clear the policy was a mistake even before it takes effect.