27 States are rebelling against Biden’s plan to make people who make good financial decisions pay for people who do not. The plan was issued by the Federal Housing Authority and would add a “fee” to the house payments of those who have good credit in order to pay for the mortgages of high risk homeowners. Basically, it punishes people with solid credit and rewards those who have made risky financial decisions. Experts warn that it is a disaster waiting to happen… and it is set to be implemented today, May 1.
State Treasurers and others wrote a letter to Biden, asking him to rescind this order. They state that there are other ways to help lower income borrowers than punishing people with good credit.
Biden’s plan was outlined just a few weeks ago by the Federal Housing Agency (FHFA) and is set to take effect today. The plan is aimed at helping lower-income borrowers afford their monthly mortgage payments – it would do so by forcing people with good credit scores to pay more each month for their mortgages, extra payments that would be credited to the loans of higher-risk borrowers…
“[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,” they wrote. “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.”
It noted that the forced extra payments will be used to hand out “better mortgage rates to people with lower credit ratings. Others have said the plan would make it easier for people with shaky credit histories to afford more expensive mortgages, a move that could put more people at financial risk. Peter Kasperowicz
Logic would tell you that granting higher-priced mortgages to people who do not have good credit histories could pose a risk to their own finances, which could become a disaster not just for the government for subsidizing it, but for the folks who received the “help.” Both Republicans and Democrats are crying foul over this plan. The letter was signed by financial officers and treasurers from Alabama, Alaska, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming. 27 states- over 1/2 of the states, most of which are red states.
Will he listen? Probably not.
Will this presidential election be the most important in American history?
*****
Related:
- Is Biden’s Credit Score Screw Job On Mortgage Pricing Even Legal?
- Punishing The Responsible: Biden Wants To Force Good-Credit Mortgage Borrowers To Subsidize The Risky
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