By Jackson Kincaid
President Biden recently announced a new plan to help low-income/poor financial managers obtain a mortgage…by punishing those who have worked hard to have a good credit score.
Biden recently announced a new plan that was outlined by the Federal Housing Agency (FHFA) and is set to take effect on the 1st of May. The plan aimed at helping lower-income borrowers afford their monthly mortgage payments – by forcing people with good credit scores to pay more each month for their mortgages. These extra payments would be credited to the loans of higher-risk borrowers.
So far 27 states have called Biden out on the atrocious plan.
"It is already clear that this new policy will be a disaster," they wrote in a letter led by Pennsylvania Treasurer Stacy Garrity that was sent to Biden and FHFA Director Sandra Thompson. "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 market has already slowed considerably due to high-interest rates – it will further depress home sales. We urge you to take immediate action to end this unconscionable policy."
They further stated this would hand "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.”
"[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. 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." – Joint letter to the Biden Administration