Just when you think the Biden administration can’t possibly have any more awful ideas, his team rolls out a plan to punish Americans with high credit scores to subsidize high-risk homebuyers.
On Wednesday, The Washington Times reported that starting May 1, Americans purchasing a new home or refinancing their existing mortgage can expect to pay higher mortgage rates and monthly fees if they have a higher credit score. Americans with lower credit scores and smaller down payments will be given better rates. In other words, Biden is essentially stealing from the rich to give to the needy by adjusting the fees on loan-level price adjustments.
“The changes do not make sense,” senior loan officer at Bay Equity Home Loans Ian Wright told the Times. “Penalizing borrowers with larger down payments and credit scores will not go over well. It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing.”
It makes sense if you are a member of the Biden administration. In the name of equity, the Biden administration seeks to close the racial gap in homeownership. To do this, they are enacting numerous changes to the housing market that will benefit those at the lower end of the spectrum — which tend to be minorities for a variety of reasons.
So, according to The New York Post, industry experts say that its going to wind up backfiring.
“It’s going to be a challenge trying to explain to somebody that says, ‘I worked my whole life for high credit and I’ve put a lot of money down and you’re telling me that’s a negative now?’ That’s a hard conversation to have,” one expert told the Post.
Even former Obama officials are sounding the alarm.
“It’s unprecedented,” David Stevens, Federal Housing Administration commissioner under President Barack Obama, told the Post. “My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move.”
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The push to put “riskier mortgages” in the hands of those who couldn’t otherwise afford homes also could cause disruption should a recession hit — which the Federal Reserve is predicting.
None of this matters to President Joe Biden and his ilk. They never let a bad idea get in the way of equity.
The views expressed in this piece are the author’s own and do not necessarily represent those of The Daily Wire.