by Walter Blanks Jr.
Why is the Trump-appointed head of the Federal Housing Finance Agency continuing, and even expanding, a Biden-era policy that economists warn could cause another housing crash?
The Wall Street Journal explains this scandal well. VantageScore was built by the three major credit bureaus partly to reduce royalties they pay to have their scores independently rated, and markets itself as more “inclusive” by more favorably scoring borrowers with limited credit histories. Officials at both Fannie Mae and Freddie Mac opposed the approval, but the Biden administration overrode them.
We just found all this out the other month, because documents came out that had nearly 200 redacted pages in them. Now, Trump appointee Bill Pulte has gone further. Rather than stopping President Biden’s bad call, Pulte said that lenders can simply choose whichever score is higher, which is called score shopping. A consulting firm estimated to the Wall Street Journal this could drive default rates up by 30%. This is precisely how the 2008 housing bubble was inflated: perverse incentives that make it easier for the housing market to collapse.
Sen. Hagerty sits on the Senate Banking Committee and has real leverage here. He should demand that FHFA explain why key documents about this decision remain heavily redacted, why the Biden-era VantageScore approval was never reversed, and whether the Trump administration actually supports continuing President Biden’s reckless economic choices.
Tennessee homeowners deserve better than a repeat of 2008 – and we have the congressional delegation that’s equipped to help.
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Walter Blanks Jr serves as Executive Director of the Legacy Society. Â
