Since Joe Biden took office as president on January 20, 2021, many former officials of Barack Obama have taken the courage to criticize the current head of state. The list includes Max Baucus, who officiated as Obama's ambassador to China, Walter Shaub, chief ethics officer from 2013 to 2017, and Larry Summers, one of Obama's top economic advisers.
This growing list recently added the name of David Stevens. A former top housing official during the Obama administration, he added his voice to the criticism against Biden. On this occasion, he condemned a proposal that will penalize reliable homebuyers by subsidizing those with higher risk.
As reported by The Washington Times, starting May 1, Americans buying a home or refinancing their mortgage will have to pay higher rates and fees if they have a higher credit score. A credit score is an evaluation assigned to a debtor to measure his or her creditworthiness. It measures the real possibility that the buyer will be able to meet their financial obligations. On the other hand, Biden's measure will reduce rates and fees for Americans with lower credit scores, i.e., those who are more likely to default on their payments or debts.
In an interview with Fox News, Stevens evaluated the measure and assured that it is "unprecedented." "We can do better programs to help more minorities access homeownership. This is not the way to do it," he added.
In a more in-depth analysis of the consequences of the White House's initiative, the former official indicated that "For the first time ever, the [FHFA] director, in an effort to bring more first-time homebuyers - particularly minority homebuyers into the GSE's lending programs - made a shift where she lowered the fees being charged to borrowers with low down payments and low credit scores and the way she compensated or they compensated for that loss of income, that capital costs that they're going to incur, is they're actually raising fees on better creditworthy borrowers who are putting down much larger down payments," Stevens added.
The move also provoked the displeasure of Robert Broeksmit, CEO of the Mortgage Bankers Association. In a letter to the Federal Housing Finance Agency, he noted that this would increase housing costs for customary buyers, even though "current tight housing market conditions already make affordability difficult."