States Push Back Against Biden’s Mortgage Redistribution Rule
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There is pushback to the Biden adminstration’s policy.
Treasurer and finance officials from 27 states urged Biden to end his policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers.
They said the plan would be a “disaster.”
Officials that signed the letter were 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.
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.”
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.
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.
“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.”
Disaster!
