With the recent adoption of credit score-based mortgage rates by the Federal Housing Finance Agency (FHFA), Republicans continue slamming the new plan. Representative Greg Steube (R-FL) called the system "a major step towards socialism" in a recent Fox News appearance.
"Biden’s new mortgage rule is a major step towards socialism. There’s no question - It will damage the economy and housing market long term," Rep. Steube stated.
This new system would offer homeowners with a FICO credit score of 620 or less a discount on their fees by charging homeowners with a credit score of 740 or higher extra. Host Elizabeth MacDonald called this maneuver "stunning," adding that this will hurt the housing market.
"Well this is just a walk towards socialism with this administration," Rep. Steube replied. "And they're completely usurping the Constitutional powers of Congress."
Biden’s new mortgage rule is a major step towards socialism.
There’s no question - It will damage the economy and housing market long term. pic.twitter.com/4DVLk3otst
— Congressman Greg Steube (@RepGregSteube) May 3, 2023
He added the Biden Administration is bypassing Congress through "rulemaking" and executive orders because its proposals would not pass through the legislative branch.
Moreover, Rep. Steube warned that by rewarding homeowners with low credit scores by punishing homeowners with better scores, economic devastation would surely follow.
"You're rewarding individuals who don't have good credit scores and penalizing those who do, who manage their finances well and done due diligence, and what you're going to end up having in a few years is a lot of risky loans that have been done on the housing market. And when people start defaulting because their credit's not good, that's going to have an overall impact on the economy, it can bring down the entire stock market, the real estate market, and everything," said Steube, comparing it to the 2008 financial crisis which began under similar circumstances.
MacDonald questions what Congress will do to counter this plan, which Steube says even if the House passes a bill, he expressed doubt Senate Majority Leader Chuck Schumer (D-NY) would support it.
"So, unfortunately, we don't have 60 votes in the Senate, and we're maybe going to have to fight this through some type of legal action. I mean, this is a complete usurpation of the legislative authority that is inherent in Congress and it's going to damage the economy and the housing market, long term overall," Steube continued.
Finally, MacDonald noted that the Biden Administration had already spent over $90 billion towards affordable housing, so why implement this credit-based mortgage rate system?
Steube said it is "all about their progressive agenda."
"It's all about their progressive agenda. Again, they're taking steps towards socialism and using the authority through rulemaking and the executive branch through the administration to exert this pressure of socialism on the American people, and that's not what America is about, and I think that the majority of America that has worked hard for their credit is going to see this type of behavior and push back," Steube concluded.
