Mississippi Treasurer David McRae joined top finance officials this week in challenging President Biden on a new mortgage rule that punishes families with good credit scores. Under the mortgage redistribution policy, home buyers who have maintained good credit scores and offer a strong down payment will face higher mortgage fees going forward. These increased fees will then be used to subsidize those with poorer credit scores.
“For decades, Americans have been told that they will be rewarded for saving their money and building a good credit score,” wrote McRae in a letter to President Biden. “This policy turns that time-tested principle upside down.”
The challenge was made in a letter McRae co-signed with nearly three dozen state financial officers from across the country. The group recognized that while there is a gap in access to credit that must be resolved, punishing those who have played by the rules is not the way to mend the problem. Furthermore, they explained this proposal fundamentally fails to address real crisis – access to affordable housing – as it does nothing to address the shortage of inventory.
“This policy amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars,” the letter concluded. “And – at a time when the real estate market has already slowed considerably due to high interest rates – it will further depress home sales…. We urge you to take immediate action to end this unconscionable policy.”
Full letter found here.