Sen. Tim Scott, R-S.C., is demanding answers from the Biden administration and warning that its new mortgage rule will create additional risk and prevent more American families from making homeownership a reality.
Scott is conducting oversight of the new rule which would force good-credit home buyers to pay more for their mortgages to subsidize loans to higher-risk borrowers. Experts have said under the rule, people with credit scores in the neighborhood of 680 might pay another $40 more per month on a $400,000 loan to subsidize higher-risk mortgages.
“We have already seen how the Biden administration’s failed economic policies have spurred inflation and hurt markets,” Scott told Fox News Digital. “I’m concerned that recent actions taken by Director [Sandra] Thompson simply create additional risk and could result in more families struggling to make homeownership a reality.”
He added, “The road to homeownership doesn’t end when you receive a mortgage—we must ensure that federal housing policy is risk-based and sustainable in the long run.”
In a letter to Director of the Federal Housing Finance Agency (FHFA) Sandra Thompson Monday, obtained by Fox News Digital, Scott is demanding answers on the agency’s decision to increase fees on creditworthy borrowers, while decreasing fees on borrowers who pose a higher risk—such as those individuals who may have low credit scores or high loan-to-value ratios.
The FHFA, which oversees federally backed home mortgage companies Fannie Mae and Freddie Mac, led the rule change, which would allow consumers with lower credit ratings and less money for a down payment to qualify for better mortgage rates than they otherwise would have.