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GOP bill would repeal Biden policy forcing people with good credit to subsidize high-risk mortgages

FIRST ON FOX: House Republicans are rolling out legislation to stop a new Biden administration regulation that, if implemented, would force lower-risk mortgage borrowers to help subsidize lower rates for high-risk borrowers.

Rep. Stephanie Bice, R-Okla., vice chair of the Republican Main Street Caucus, told Fox News Digital on Wednesday that President Biden was enabling a “culture of dependency” and blasted the White House for levying new regulations while skirting Congress to do so.

“Whether its student loan forgiveness or their mortgage rule, through the power of the pen, Biden and his executive agencies are attempting to bypass Congress and fundamentally change how our country operates,” Bice said. “We should not punish individuals who have made sound financial decisions or have the government incentivize lowering credit scores.”

Her bill, the Free Market Mortgage Act of 2023, would repeal a new policy that the Federal Housing Finance Agency (FHFA) intends to enact next month. 

BIDEN RULE WILL REDISTRIBUTE HIGH-RISK LOAN COSTS TO HOMEOWNERS WITH GOOD CREDIT

Stephanie Bice

Rep. Stephanie Bice, R-Okla., is interviewed by CQ-Roll Call, Inc via Getty Images in her Rayburn Building office on March 22, 2023. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

Experts have said that under the rule, people with credit scores in the neighborhood of 680 might pay another $40 more per month on a $400,000 loan to subsidize higher-risk mortgages.

“Due to reckless spending and high inflation, interest rates have already increased significantly, and the last thing we should do is add more fees for homebuyers. We cannot continue a culture of dependency. My legislation prevents the Biden administration from implementing this senseless rule,” Bice said. 

Her bill is co-sponsored by at least six other Republican lawmakers.

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President Biden

President Biden speaks about the economy at the International Union of Operating Engineers Local 77 facility in Accokeek, Maryland, on April 19, 2023. (JIM WATSON/AFP via Getty Images)

The new mortgage policy has faced broad opposition from the GOP, and has even been criticized by members of Biden’s own party. President Obama’s former Federal Housing Administration commissioner, David Stevens, told Fox News, “We can do better programs to help more minorities get into homeownership. This is not the way to do it.”

The legislative push follows a letter by House Financial Services Committee Chair Patrick McHenry, R-N.C., and Housing and Insurance Subcommittee Chair Warren Davidson, R-Ohio, sent to FHFA Director Sandra Thompson on Tuesday threatening action if the policy was not repealed. 

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“There is no doubt that lenders will pass on these new… costs to borrowers, which will result in higher mortgage rates and reduced access to credit,” the lawmakers wrote. “This new tax also fails the basic test of fairness by punishing borrowers who act responsibly, and will in turn incentivize homebuyers to reduce their down payments and carry additional debt.”

Warren Davidson

Rep. Warren Davidson, R-Ohio, listens during a House Financial Services Committee hearing on oversight of the Treasury Department and Federal Reserve coronavirus pandemic response on Capitol Hill in Washington, D.C., on Sept. 30, 2021.

Davidson panned the new policy as “socialist” in a statement to Fox News Digital on Wednesday. 

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“The Biden administration’s new mortgage rule penalizes fiscally responsible home buyers by forcing them to subsidize those who aren’t. It’s a socialist redistribution of wealth,” he said. “If the FHFA doesn’t reverse this rule, Congress must.”

Fox News Digital has asked Davidson and McHenry if they intend to support Bice’s bill but did not immediately hear back.

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