Biden To Punish Borrowers With Good Credit

( — Inflation is high and climbing in 2023.

The Biden Administration has made several attempts to curb the rocketing trend, but most Americans still have less money in their pockets. President Biden’s latest effort includes punishing homebuyers with good credit.

At its core, Biden’s scheme is basically a wealth redistribution plan. In other words, through various tax breaks, incentives and penalties, he wants to take more money from citizens who pay their bills on time and give it to people with bad credit.

Paying bills on time has long been rewarded with a commendable credit score. A good credit score typically results in lower rates for a potential borrower. The idea is that the borrower has set a precedence for reliability and responsibility, and is a lower risk to lenders. A loan to a borrower with good credit is set up to be successful for both parties.

Defaulting on bills usually has the opposite effect. Borrowing opportunities are fewer and farther between, and any loan offers come with higher rates and fees. Lenders often choose not to take a risk on lower credit consumers because they may not recover their money.

Enforced by the Federal Housing Finance Agency, Biden plans to have borrowers with a credit score over 680 pay higher fees, suffer higher interest rates, and pay more per month than their lower credit counterparts. As well, if a borrower comes to the table with a healthy down payment, Biden’s new rules will have him pay more for the overall cost of his mortgage.

In effect, Biden will saddle the country with an influx of risky mortgages sold to people with bad credit and low down payments. Subsidized by higher costs shifted to borrowers with better credit, Biden says more citizens have a chance at home ownership.

Opponents fear a result similar to the 2007 home loan crisis, brought on by the familiar policies of the Clinton and Carter administrations.

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