Consumer News

AG Kobach to Biden admin: Reconsider unfair mortgage lending rule

Release Date: May 05, 2023

TOPEKA – (May 10, 2023) – Kansas Attorney General Kris Kobach today blasted a Biden administration rule that increases mortgage interest rates for homebuyers with good credit to reduce rates for homebuyers with lower credit scores. In a letter joined by 16 other state attorneys general, Kobach requests that the administration reconsider the punitive policy.

“This rule is an insult to low-income Americans, because it assumes they don’t pay their bills on time,” Kobach said of the policy. “Low income does not necessarily translate into low credit scores. This policy will most hurt those it portends to help – low-income earners with good credit scores who work hard, save diligently, and pay their debts responsibly.”

The Federal Housing Finance Agency's loan-level pricing adjustment policy went into effect earlier this month. Under the rule, individuals with high credit scores pay higher rates to subsidize the loans of high-risk borrowers.

"Your agency’s decision to punish the diligent and thrifty is deeply unfair. In some cases, the charges have tripled. It’s one more slap in the face to hard-working Americans from an administration that has already presided over economic uncertainty, runaway housing prices, and the highest interest rates most first-time homebuyers have ever seen," the letter reads.

Other states joining the letter include Alabama, Arkansas, Florida, Georgia, Iowa, Idaho, Indiana, Kentucky, Louisiana, Missouri, Mississippi, Montana, New Hampshire, South Carolina, Texas, and Virginia.

Read the letter here.