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A coalition of fiscal officers from 27 state governments called President Joe Biden and Federal Housing Finance Agency (FHFA) Director Sandra L. Thompson to jettison the new mortgage fee increases that went into effect today.

In a letter to Biden and Thompson, the fiscal officers declared the new policy a “disaster” and said the fee increases will create new financial burdens for homebuyers with good credit by forcing them to pay more on their monthly mortgage bills.

“The policy will take money away from the people who played by the rules and did things right – including millions of hardworking, middle-class Americans who built a good credit score and saved enough to make a strong down payment,” the letter said. “Incredibly, those who make down payments of 20% or more on their homes will pay the highest fees – one of the most backward incentives imaginable. For decades, Americans have been told that they will be rewarded for saving their money and building a good credit score. This policy turns that time-tested principle upside down.”

The fiscal officers, who are led by Pennsylvania Treasurer Stacy Garrity, acknowledged “a gap in access to credit and that low credit scores are a significant barrier to buying a home,” although they also cited affordable housing assistance programs are available. They also noted the new policy does not to address the historic lows in current housing inventory.

“But the right way to solve that problem is not to use the power of the federal government to penalize hardworking, middle-class American families by confiscating their money and using it as a handout,” they continued. “The right way is to implement policies which will reduce inflation, cut energy costs and bring lower interest rates. Doing so will enable more families to save and improve their credit scores. Increased financial literacy efforts must also be part of the solution.”

The letter ended with the request for “immediate action to end this unconscionable policy.”

Biden has never publicly commented on the mortgage fee increases. Last week, Thompson’s office issued a statement claiming that “much of what has been reported advances a fundamental misunderstanding about the fees charged by the Enterprises, and why they were updated.”

Photo by Gage Skidmore / Flickr Creative Commons