The Biden Admin’s New Rule Will Punish People With High Credit Scores

For centuries, politicians in this country assumed that in order to win an election, you had to convince voters to vote for you. You had to make their case. That was called democracy.

But the defining strategic insight of the modern Democratic Party is they don’t really need to convince anyone of anything. What matters is demographics. To import enough people from elsewhere, people who are financially dependent on you in order to live. That’s the story of the state of California. {snip}

So, if you want total control over the entire country, you need demographic change everywhere, including in the suburbs. This is a very obvious insight and Democrats have been on the case for quite a while. Back in 2009, the Obama administration took the county of Westchester in New York, a solidly Democratic place, to court. Why did they do that? The administration withheld tens of millions of dollars in federal funding unless Westchester pledged to build 10,000 low-income, high-density apartments in their suburbs.

The Obama administration later implemented a rule requiring suburbs to take “affirmative steps to diversify their neighborhoods” or else they would lose federal money. When he took office, Joe Biden threw his support behind something called the Home Act. Among other things, the Home Act would allow the federal government to withhold funds from local governments if they didn’t find ways to add high rise apartments or high-density zoning to suburbs.

Specifically, the act would have prevented local governments from enacting “ordinances that ban apartment buildings from certain residential areas or set a minimum lot size for a single-family home.” So, you can’t be safe in a leafy suburb anymore. It has to be urbanized.

The Home Act has stalled in Congress. It has never become law. But the Biden administration didn’t give up just because democracy didn’t produce the results they wanted. They still plan to change the suburbs forever by getting rid of them. Joe Biden’s HUD secretary, Marcia Fudge, a former member of Congress, explained last year the administration was concerned that African Americans couldn’t afford homes not because they’re poor, but because home appraisers are racist. {snip}

{snip}

So, without any vote in Congress, the Biden administration has just introduced a rule, – not a law, a rule –that will punish Americans who’ve tried to do the right thing, punish people with high credit scores. The people with high credit scores will pay higher fees on their mortgage payments to subsidize people who haven’t maintained good credit.

So, these rules take effect on May 1st, whether you like it or not and they mean that anyone with good credit that’s defined as a score of 680 or above is going to have to pay roughly $40 a month extra on their mortgage fees than those with lower scores on home loans for around $400 grand.

So, here’s an example. If you have a FICO score of 620, you get a 1.75% discount on your mortgage fees. If you have a 740 score == in other words you pay your bills on time, you’ve done the right thing, you’re a good citizen – you have to pay 1% more. So, you don’t get a discount for doing the right thing and paying your bills, you get punished.

We are incentivizing bad behavior. We’re hurting the good people. Since the day you were born, you have been told, “Pay your debts. It’s not your money. You bought it from somebody else. You have to pay it back. If you don’t, it’s stealing.” Now we’re saying if you don’t steal, we’re going to hurt you and in real life, that means that over the course of a 30-year mortgage for a $400,000 home, that’s a swing of more than $14,000, and they’re claiming racism to justify this.

Black Americans are the only racial group in this country with average credit scores of under 680. Now, why is that? We don’t know. Whites, Hispanics, Asians have higher credit scores. Therefore, as you’d expect, the mortgage style rate for African-American borrowers is higher than the overall population. It’s double in this country’s biggest markets, and that’s the reason the suburbs have different demographics from the cities. That’s called economics.

Now, if you wanted to change that, you would encourage people to have good spending habits and pay back their debt. But they don’t care about that. Making people happy or getting them out of debt? No, they want to change the suburbs, make them denser so there be more reliably Democratic voting. {snip}

{snip}