Come on, President Biden, say it ain’t so. The current administration has now imposed a monetary penalty on those with good credit scores who seek a mortgage in order to help those with lower credit scores who apply for a mortgage.
That is totally unfair. The administration is using its rule power over agencies like the Federal Housing Finance Agency (FHFA) which regulates federal mortgage guarantors Fannie Mae and Freddie Mac, to change our country’s mortgage policies.
Here is how the Wall Street Journal described it recently in an April editorial:
“Income redistribution is an abiding value of the Biden Administration, and now it wants to spread that to mortgage lending. A new rule will raise mortgage fees for borrowers with good credit to subsidize higher-risk borrowers. Under the rule, which goes into effect May 1, home buyers with a good credit score over 680 will pay about $40 more each month on a $400,000 loan, and upward depending on the size of the loan. Those who make down payments of 20% on their homes will pay the highest fees. Those payments will then be used to subsidize higher-risk borrowers through lower fees.”
BIDEN’S MORTGAGE REDISTRIBUTION PLAN SPARKS OMINOUS WARNING AS EXPERTS NOTE SIMILARITIES TO PRIOR CRISIS
If the president wants to fund a first-time buyer mortgage program, that’s OK, although it should be noted that many of these programs already exist. However, one thing should be very clear: this new mortgage plan is nothing more than socialism, regardless of what the administration calls it.
I equate this new income redistribution program with the student loan forgiveness plan unveiled by the Biden White House in August 2022. Like the new mortgage plan, the president’s student loan plan is total income redistribution. Both programs penalize one group under the guise of helping another.
Having immigrated here to this great country from a country that adopted this system in the late 1950s, I can personally attest that socialism does not work, and the government should never pick winners and losers.
BIDEN’S MORTGAGE REDISTRIBUTION PLAN MAY BURDEN ONE MINORITY GROUP THE MOST: EXPERTS
Here is my personal point of view and story as an immigrant to this great country. My parents never accepted any welfare or government assistance handouts. They worked two or more jobs each day as they began their new life in America and had to make ends meet to raise three big and hungry boys.
My mom and dad worked in factories while we lived in a two-bedroom apartment above a deli in the Bronx. I wanted to attend college but knew my parents could not afford to pay for my tuition. I also wanted to serve our great nation in the military to say thank you for taking us in as immigrants to live in freedom.
So, after completing high school in Miami, I joined the military and served almost five years in the United States Air Force.
I attended university classes Monday to Thursday evenings on the military bases where I was stationed after working all day in my military job. When I received my honorable discharge, I attended law school at the University of Iowa and I borrowed $6,000 as student aid to help pay for my education.
After I graduated and began to work in my first law job making $25,000 a year, I bought a home and a car and started to repay my student loans.
I paid off my student loans three or four years after I graduated. Now here comes President Biden handing out debt relief like Christmas gifts to those who did not repay their loans, no matter their families’ income levels.
I wish I could ask the president, “What do people like me get, Mr. Biden, those of us who were responsible and repaid our student loans? Had I never paid off my loan, would it be forgiven, too? Does this immigrant who served our country in the military get some sort of monetary credit for being a responsible citizen?”
And here’s my final question for President Biden, “What if my parents had been wealthy, and I still did not repay my student loan – is that fair?”
Traditionally, mortgage rates are based on a variety of factors such as income, credit score, and risk. Now comes the president’s new mortgage income redistribution plan which can be likened to students: If you have one student who studies and works hard to make As while the other student parties, fails to study, and makes Cs, is it fair to give them both Bs? Under President Biden’s philosophy, it is. This is not how grades should be distributed, nor is it true for mortgages.
Mr. Biden, of course, we should help our country’s truly needy but don’t penalize those who have worked hard and sacrificed. There was a time when this country rewarded such ideals. It’s time to get back to them.
Alex Sanchez is president and CEO of the Florida Bankers Association, which has membership of small, regional and large financial institutions that together employ tens of thousands of Floridians, safeguard more than $800 billion in deposits. Sanchez served on the EXIM Bank Advisory Committee from 2018 to 2020. He was appointed by President George W. Bush as a Board member to the Federal Retirement Thrift Investment Board from 2003-2010, and confirmed by the U.S. Senate in 2003. Sanchez served in the United States Air Force from 1976-1981.
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