‘Unconscionable’: 27 States Challenge Biden’s Plan To Punish Home Buyers With Good Credit

State Officials Demand End to Mortgage Redistribution Program

Over 30 officials from 27 states are calling on the Biden administration to end its controversial mortgage redistribution program. The program forces borrowers with good credit scores to pay more to subsidize loans for borrowers with poor credit. This policy will take money away from hardworking, middle-class Americans who built a good credit score and played by the rules.

BREAKING: 34 state financial officers from 27 states have signed-on to a letter to the Biden Administration demanding that they end their new mortgage equity program, which forces buyers with good credit to pay higher rates to subsidize loans for riskier borrowers. pic.twitter.com/P8RHbj0zzf

— Will Hild (@WillHild) May 1, 2023

How the Policy Works

The policy, which goes into effect on Monday, will increase monthly mortgage payments for borrowers with good credit scores. The Federal Housing Finance Agency will use the revenue from higher fees to lower the monthly mortgage cost for borrowers with poor credit. Riskier borrowers with low credit scores or income will still pay more each month for their mortgage, but much less than they paid before. In order to compensate for that lost revenue, borrowers with strong credit will see their monthly payments increase by roughly $40 a month on a $400,000 mortgage. That’s an extra $14,400 over the course of a standard 30-year mortgage.

The state officials are calling this policy a middle-class tax hike that will unfairly cost American families millions upon millions of dollars. They urge the Biden administration to take immediate action to end this unconscionable policy.

Former Federal Housing Finance Agency director Mark Calabria believes that the new policy is an attempt by the Biden administration to subsidize minorities without falling foul of federal law against racial discrimination. “The Biden administration is definitely trying to create more of a cross subsidy between good credit and bad credit, that’s the intent,” Calabria told the Free Beacon. “They are essentially trying to discriminate by race within the legal rules they have and minorities tend to have lower credit scores.”

What You Need to Know

• The mortgage redistribution program forces borrowers with good credit scores to pay more to subsidize loans for borrowers with poor credit.
• The policy goes into effect on Monday and will increase monthly mortgage payments for borrowers with good credit scores.
• The state officials are calling this policy a middle-class tax hike that will unfairly cost American families millions upon millions of dollars.
• Former Federal Housing Finance Agency director Mark Calabria believes that the new policy is an attempt by the Biden administration to subsidize minorities without falling foul of federal law against racial discrimination.

Don’t let this policy affect your finances. Stay informed and take action to protect your hard-earned money.