Democrat President Joe Biden has a new plan to penalize homeowners who have good credit scores by making them pay more monthly to subsidize costs for high-risk buyers.
The changes will begin in May and have many experts furious.
The plan will hit home buyers with a FICO credit score of 680 or above.
David Stevens, a Federal Housing Administration commissioner during the Obama administration, blasted the move.
“It’s unprecedented,” Stevens said.
“My email is full from mortgage companies and CEOs telling me how unbelievably shocked they are by this move.
“This was a blatant and significant cut of fees for their highest-risk borrowers and a clear increase in much better credit quality buyers – which just clarified to the world that this move was a pretty significant cross-subsidy pricing change.”
Madison Ventures+ managing director Mitch Roschelle slammed the plan as “madness.”
“It’s bizarro world,” Roschelle said.
“That fee that’s charged, PMI, which is personal mortgage insurance, that fee that FHFA charges is intended to punish those with lower credit scores and riskier loans, so basically level the playing field from a risk perspective.
“Well, what are we doing? We’re doing the opposite.
“If you have a high credit score, and 680 is a good credit score, you have to pay more.
“And we’re talking about real money.
“This could be $100 a month more depending on the size of your loan. So it makes no sense.
“And by the way, this isn’t about first-time homebuyers. There’s nothing in this rule that says it applies to first-time homebuyers.
“It applies to anybody borrowing money that’s insured by FHFA. It’s madness.”
Strategic Wealth Partners CEO Mark Tepper said:
“We mentioned the student loan issue.
“Cab drivers who never went to college are subsidizing that student loan debt, and in this situation, this Biden administration more and more often, they are making decisions to reward bad decisions.
“That’s not the way you grow as a country, as an economy, by essentially saying, ‘hey, if you spent recklessly, you lived above your means and you stopped making your payments on time, have no fear. Someone who’s done it the right way is going to pay for you.’
“That’s not what capitalism is all about, and it puts us in a situation where there’s no consequences when you make bad decisions,” he said.
https://t.co/7eNy4396Yi This executive order from Joe Biden is a distaster.
Punishing hardworking Americans who built themselves to a good credit score / in the progress of getting to a good score, to appease those who fucked up their credit. Socialism for Homeowners.
— Gabe in Hot Arizona🔥 (@schoolmaster456) April 20, 2023
KAMALA HARRIS: “One day I’m gonna write a cookbook” pic.twitter.com/8xXd66b13u
— RNC Research (@RNCResearch) April 20, 2023
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