BUSINESS_ Biden Admin Quietly Injecting Radical Policies Into Housing Market — And It Might Bring The Whole System Down

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Biden Admin Quietly Injecting Radical Policies Into Housing Market — And It Might Bring The Whole System Down

(Photo by Ethan Miller/Getty Images)

DAILY CALLER NEWS FOUNDATION

Will Kessler
Contributor
June 08, 2024 1:07 PM ET


The Biden administration has pushed for easier home financing for higher-risk borrowers amid surging housing costs, increasing the risk of a wave of defaults, experts told the Daily Caller News Foundation.

The government-sponsored corporations Freddie Mac and Fannie Mae, regulated by the Federal Home Financing Administration (FHFA), have taken a number of steps to increase financing opportunities for higher-risk borrowers under the Biden administration, including subsidizing higher-risk borrowing by hiking rates on lower-risk borrowers. Many of these actions have led to Americans taking on an increasingly large amount of debt while lending facilitated by government entities has grown in size, creating a growing possibility that a wave of foreclosures and defaults could create a shock in the housing system, according to experts who spoke to the DCNF. (RELATED: Smoke And Mirrors: NYC’s ‘Jobs Boom’ Was Really Just Taxpayer-Funded Spending Spree)

“The new Fannie and Freddie mortgage pricing directive raised rates on low-risk borrowers and reduced them on high-risk borrowers,” Jason Sorens, senior research fellow at the American Institute of Economic Research, told the DCNF. “This is not really a free market to begin with, but the risk here is creating something like the subprime crisis, where high-risk borrowers are encouraged to take on debt they can’t repay. Again, this has the potential to hit the bottom line for Fannie and Freddie.”

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READ MORE: https://dailycaller.com/2024/06/08/biden-admin-radical-policies-housing-market-system/

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