State financial officers push back against Biden admin mortgage hikes: 'backward incentives'

A group of state financial officers from 27 states is pushing back against a plan from the Biden administration to subsidize mortgages for poor-credit homebuyers by hiking rates on those with stronger financial histories.

The Federal Housing Finance Agency announced in April that come May 1 it would implement the policy through the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

Led by Pennsylvania Treasurer Stacy Garrity, a group of 34 state financial officers, among them treasurers, auditors, and officeholders in myriad other posts, excoriated Biden in Monday letter, which they also sent to FHFA Director Sandra Thompson.

The group warned that the administration policy would have "the net effect of making it significantly more expensive for people with good credit to buy houses."

"[T]he policy will take money away from the people who played by the rules and did things right – including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment," the state officials wrote. "Incredibly, those who make down payments of 20 percent or more on their homes will pay the highest fees – one of the most backward incentives imaginable."

The group contended that the government ought to address housing affordability concerns by addressing broader economic issues.

"The right way is to implement policies which will reduce inflation, cut energy costs and bring lower interest rates," they asserted.

"We all want to increase home ownership across our great country – that’s a central component of the American Dream," the group continued. "And we recognize that there’s a gap in access to credit and that low credit scores are a significant barrier to buying a home."

"It is already clear that this new policy will be a disaster," they concluded. "We urge you to take immediate action to end this unconscionable policy."

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.