TAPP Signs onto Coalition Letter Urging Caution with New Mortgage Credit Scoring Rules

The Trade Alliance to Promote Prosperity recently signed onto a letter from a coalition of 30+ organizations to Federal Housing Finance Agency Director William Pulte, urging caution in the implementation of new mortgage credit scoring rules.

In part, the coalition wrote, “Owning a home is to millions of families at the heart of the American Dream. They should be able to fulfill that aspiration when they are financially prepared to do so. We also recognize the importance of protecting taxpayers from unwanted, coercive bailouts. Too often in the past, families not yet ready to become homeowners have been pushed into it by government regulatory, fiscal, and monetary policies. The result was the 2008 financial crisis, largely driven by many bad mortgages failing at once. These defaults triggered a cascade of events that eventually led to multiple taxpayer bailouts. We are sure you agree that this crisis should never happen again… The best way to avoid the danger of a taxpayer bailout is a measured, prudent, deliberate, and widely consulted implementation of new policy in the credit scoring rules surrounding mortgage lending. That way, the transition to the new system is smooth, competition and innovation in credit scoring is fostered, systemic costs are minimized, and taxpayers are protected.”

Already, the U.S. tax system places our country at a competitive disadvantage compared to low-tax countries. Any additional burden on American taxpayers--such as another bailout would inflict--would further unjustifiably dampen U.S. competitiveness and distort international trade patterns. This is why TAPP signed onto the coalition letter.

Read the full letter here.