Senator Rick Scott (R-FL) has long been an opponent of President Joe Biden (D) and his administration’s economic policies, and now he has joined Senator Mike Braun (R-IN) to address a provision that “increases mortgage rates for many middle class Americans.”
The provision, brought forth by the Biden administration in May, would reward homeowners with lower credit scores by forcing those with higher credit scores to subsidize the market.
At the time, Representative Greg Steube (R-FL) called it a “major step towards socialism.”
The Middle Class Borrower Protection Act addresses the Biden administration’s plan by returning the Loan-Level Price Adjustment (LLPA) back to its former state while also aiming to “ensure that the irresponsible decision-making that led to this change will not be repeated.”
The Federal Housing Finance Agency (FHFA), which oversees the majority of mortgages in the United States announced in May that those with a FICO credit score below 620 will receive a discount on their fees, while simultaneously granting a monthly fee on those with credit scores higher than 740.
One of the main causes of the housing market crash in the late 2000s was banks accepting those applying for mortgages with risky, low credit scores, and granting them gargantuan (sometimes multiple) loans.
Mortgages were viewed as a safe risk, because “who wouldn’t pay their mortgage?” Those same banks that granted those risky loans went bankrupt and were bailed out by the federal government.
Sen. Scott said that the initial decision to change the LLPA protocols is “Bidenomics’ in action,” but that the Middle Class Borrower Protection Act will properly address this circumstance.
“Folks that have worked hard to save up and build good credit shouldn't be punished for doing so. This is ‘Bidenomics’ in action. People who are responsible, like those who have paid off their student loans or Americans who’ve worked hard to build good credit, should be seen as role models, not piggy banks for the left. It’s not fairness, it’s socialism, and I’m proud to join my colleagues to reverse it,” stated Sen. Scott.
Sen. Braun said that the provision “makes it difficult for everyday Americans” and that it is “unfair.”
“The average American has a credit score over 716. The Biden administration is making home ownership more difficult for everyday Americans by raising rates for most people with a credit score over 680 to subsidize riskier borrowers. I urge my colleagues in the Senate to quickly vote to overturn this unfair rule that penalizes fiscal responsibility.”
Should the bill pass, it will make its way to the Democrat-controlled Senate.
