Senate Republicans are taking aim at a "Shortsighted" Biden administration rule that will force homebuyers with good credit scores to pay higher mortgage rates and fees to subsidize people with riskier credit ratings who are also in the market to buy houses.
Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000.
The senator accused President Biden of using the changes for political gain.
In their letter, Senate Republicans said the FHFA has tried before to "Social-engineer the U.S. housing market" by tweaking the rules that the government-sponsored enterprises must follow.
The letter from Mr. McHenry and Mr. Davidson said the changes "Cannot be justified from a risk management perspective, and amount to a tax on all creditworthy GSE homebuyers to subsidize borrowers with riskier loans."
"However, the changes mandated by FHFA in January of this year will achieve the opposite result. These changes violate the fundamental principle of risk-based pricing, namely that lower-risk borrowers should pay lower prices for access to credit than higher-risk borrowers. There is no doubt that lenders will pass on the new LLPA costs to borrowers, which will result in higher mortgage rates and reduced access to credit."
President Obama's Federal Housing Administration commissioner, David Stevens, told Fox News that the nation "Can do better programs to help more minorities get into homeownership."
https://www.washingtontimes.com/news/2023/apr/26/senate-gop-rebukes-biden-rule-forces-homebuyers-go/
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