The Biden administration continues to disappoint responsible Americans, this time with a new housing rule that incentivizes people to worsen their credit. David Stevens, who served as the director of the Federal Housing Authority during the Obama Administration, called out this unjust proposal during a Fox News interview with Sandra Smith.
There aren’t a lot of Obama officials that have nice things to say about Biden’s policies https://t.co/VTTCgMPggi
— Daily Caller (@DailyCaller) April 21, 2023
The Federal Housing Finance Agency (FHFA) is set to put a rule into effect as of May 1, that would increase fees for borrowers with higher credit scores in order to subsidize those with lower credit scores, according to Fox News. While it may sound reasonable to some, in practice it punishes responsible homeowners and rewards risky borrowers. Under the proposed rule, a home buyer with a $400,000 mortgage and a credit score of 680 could pay an additional cost of $40 per month.
As Smith observed, it has always been in the best interest of homeowners to have high credit scores and pay bills on time in order to enjoy lower costs and fees for their homes. Stevens echoed the sentiment, claiming that this proposed policy is extremely problematic because it incentivizes those with bad credit scores to take the path of least resistance, rewarding their irresponsibility.
Stevens also pointed out that this rule is a departure from the traditional underwriting principles Fannie Mae and Freddie Mac have followed ever since their inception. Rather than incentivizing bad behavior, Stevens encouraged the government to find a more sensible and responsible way to approach the issue of surging housing costs.
The proposed housing rule is a short-sighted ploy that caters to the whims of the more radical factions of the Democratic Party. It is a clear violation of the discipline that Fannie Mae and Freddie Mac have long operated under, and Stevens is absolutely right to criticize it. Biden needs to stick to more practical and responsible policies if he truly expects to succeed as president.