Financial expert Gary Kaltbaum says the new Biden rule forcing people with good credit to subsidize high-risk mortgages 'makes absolutely no sense' on 'Your World.'There is a troubling trend toward abrogating the use of credit scores, criminal history andrisk from the misbegotten sense that doing so will result in a better outcome for people who have traditionally fared poorly in the housing market, whether looking for a mortgage or a lease.
Those efforts will shift risk measurement to risk reduction in the form of higher prices. The answer is to help people improve their risk profiles with credit repair, broader measures and real help for people with criminal backgrounds. Is there a problem? According to the National Association of Realtors, homeownership has been climbing among the general population, so that 65% of Americans are homeowners or paying a mortgage. But for Black households, the number hasn’t moved over that period, staying stuck at 44% while 72% of White people are homeowners. It shouldn’t be a surprise with a look at poverty rates – 19.5% of Blacks are in poverty while the overall poverty rate is 11.