State treasurers and other top finance officials from 27 states on Monday urged President Biden to end what they said was his “unconscionable” policy of forcing people with good credit scores to subsidize mortgage loans of higher-risk borrowers, and warned Biden’s plan would be a “disaster.”
Biden’s plan was outlined just a few weeks ago by the Federal Housing Agency (FHFA) and is set to take effect today. The plan is aimed at helping lower-income borrowers afford their monthly mortgage payments – it would do so by forcing people with good credit scores to pay more each month for their mortgages, extra payments that would be credited to the loans of higher-risk borrowers.
The controversial policy has been attacked by both Republicans and Democrats, including President Obama’s former Federal Housing Administrator. On Monday, financial officers from 27 states weighed in and said it was clear the policy was a mistake even before it takes effect.
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