New junk fees imposed on homebuyers by the Biden administration poison longstanding mortgage and consumer credit policies in pursuit of a woke agenda, State Treasurer Dale R. Folwell, CPA, said. He believes the misguided activism will have disastrous effects on the housing market and economy.
“Most Americans have made tough choices that resulted in higher credit ratings, only to be punished,” Treasurer Folwell said. “We’ve seen before the catastrophic results when lawmakers and central planners in Washington meddled in the natural order of supply-and-demand economics in the housing market.”
His comments were made after attending a recent North Carolina Homebuilders Association event at which attendees shared with him their serious concerns about new federal guidelines.
The Federal Housing Finance Agency (FHFA) implemented a fee payment policy at the beginning of May. It forces homebuyers who have exercised care in building strong credit scores and saved enough money to make a substantial down payment to subsidize high-risk borrowers with little down payment skin in the game.
The National Association of Home Builders opposed the higher fees on borrowers with higher credit ratings, and supported lower fees for all homebuyers instead.
“The fees paid by those who have played by the rules and done the right things will increase their mortgage payments. Homebuyers already are paying higher mortgage interest rates in the Biden economy, and this new social progressive policy saddles them with an even higher burden,” Treasurer Folwell said. “It is sheer folly to upend long-established financial principles, especially at a time when there are signs the housing market could be headed for a negative correction amid ongoing concerns about a potential recession.”
The National Association of Realtors tracks home sales and its data shows they declined more than 23% in April year-over-year numbers.
Treasurer Folwell was among 34 state financial officers who signed a letter to President Biden and FHFA Director Sandra Thompson expressing worries that the ill-conceived policy “amounts to a middle-class tax hike that will unfairly cost American families millions upon millions of dollars. And ... it will further depress home sales,” all of which occurred without the substantive policy changes going through the normal federal rulemaking process.
“We all want our friends and neighbors to achieve the American Dream of homeownership. It’s an important way to create generational wealth,” Treasurer Folwell said. “But robbing Peter to pay Paul is not the way to go about it. Reducing taxes, abandoning fiscal policies that drive up interest rates, making use of existing affordable housing programs and increasing financial literacy are time-tested approaches that work best.”