A former Obama administration official ripped a proposed Biden administration rule Thursday, saying it incentivized people to “worsen their credit.”
“This is really convoluting the entire discipline and credit risk pricing structure that Fannie Mae and Freddie Mac have followed since their inception,” David Stevens, who served as director of the Federal Housing Authority (FHA) during the Obama administration, told Fox News host Sandra Smith.
A rule from the Federal Housing Finance Agency (FHFA) that would increase fees on borrowers with high credit scores in order to subsidize those with lower credit scores is slated to take effect May 1, Fox News reported. A home buyer with a $400,000 mortgage and a credit score of 680 could pay $40 more a month under the proposed rule.
WATCH:
“You have always been incentivized to have better credit and pay your bills on time because you will be rewarded with lower costs and lower fees to get into a home,” Smith observed. “David, obviously, the peril in this is that you are incentivizing bad credit scores to get lower costs. There’s only so long it could last. You won’t be able to pay for the risky home buyers if people are incentivized to have lower credit.”
“Yeah, I’ve literally just got an email from an executive with a mortgage lending company, goes ‘So I guess we have to teach borrowers to worsen their credit before they apply for a mortgage to get a better price,’” Stevens said in response.
Stevens questioned the wisdom of the proposed rule.
“Using Fannie Mae and Freddie Mac for these sort of political purposes may not be the best thing to do, and frankly, I think it violates the entire discipline the two companies have operated under,” Stevens said.
All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
DONATE TO BIZPAC REVIEW
Please help us! If you are fed up with letting radical big tech execs, phony fact-checkers, tyrannical liberals and a lying mainstream media have unprecedented power over your news please consider making a donation to BPR to help us fight them. Now is the time. Truth has never been more critical!
- Jonathan Turley says Alvin Bragg is making Trump’s immunity case ‘for him’ - April 25, 2024
- Chris Christie appeared to joke about wishing for a Trump-Ramaswamy ‘death match’ where ‘they both die’ - April 24, 2024
- ‘Let me speak!’: Fox panel comes unglued when Leo Terrell calls Joe Biden ‘pro-Hamas’ - April 24, 2024
Comment
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the ∨ icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.
BPR INSIDER COMMENTS
Scroll down for non-member comments or join our insider conversations by becoming a member. We'd love to have you!
