They're Doing It Again

“Those who do not learn from history, are bound to repeat it.” Joe Biden just announced that in an effort to increase home ownership among minority and disaffected groups, the federal government will be implementing a new federal rule which will impose higher mortgage fees on people with credit scores above 680, and those fees will be used to subsidize the mortgage fees for people with credit scores below 680. So, people who acted responsibly, didn’t take on too much debt, and paid their bills will be punished, and those who acted irresponsibly, who took on too much debt, bought things they couldn’t afford and subsequently did not pay their debts, will be rewarded.

On the surface, this rule appears to be a redistribution of wealth scheme predicated on race. For whatever reason, white communities had an average credit score of 727 in 2021, while Hispanic communities’ scores were 667 and Black communities were 627. So, this rule will transfer wealth from white communities to black and Hispanic communities for no legitimate reason. If a disproportionate number of people with a credit score lower than 680 were white, I wonder if this rule would have even been considered. When you view every problem through the lens of race, you end up with illogical solutions like this.

I thought we learned this lesson fifteen years ago. But once again, the Democrats are creating artificial rules in the mortgage industry to encourage home ownership among minority groups. The roots of the 2008 banking crisis started back in the Clinton administration when HUD attempted to increase home ownership among minority groups by changing the rules of lending (sound familiar?). HUD concluded that the disparity in home ownership between the races was a result of systemic racism in the mortgage industry. They claimed that the rules and requirements that governed the mortgage approval process that had been set in place by Fannie Mae, such as credit score, down payment, job history, debt and income were not designed to prevent mortgage defaults, but were actually, a new and nefarious way of re-instituting red lining against minorities.