But the latest salvation scheme ignores the sordid history of federal policymakers ravaging homeowners they promised to rescue.

Giving people mortgages they can't afford can ruin their lives.
[Click to Tweet]

As of May 1, a Biden administration decree requires adjusting mortgage calculations to penalize homebuyers with a FICO credit score of above 680 — almost two-thirds of the population. This levy will be used to reduce costs for people with low credit scores — that is, risky borrowers more likely to default on mortgages.

Congressman Michael Lawyer (R-NY) complained, "This new rule unfairly penalizes Americans for having good credit and rewards those who accrue debt and don't pay their bills with cheaper loans." Former Federal Housing Finance Agency director Mark Calabria emailed me that moving away from "risk-based credit … will ultimately harm both borrowers and financial stability."

Federal regulations require that all charges and credits to buyers and sellers be explicitly listed in mortgage settlement statements. The new federally mandated penalty for creditworthy borrowers should be explicitly listed on loan documents as a Social Justice Surtax. That surtax could amount to $60 or more per month — equivalent to more than $20,000 over a 30-year mortgage.