This will cause a global financial crisis. This very thing is what happened in the sub-prime mortgage crisis in 08/09 and the student loan bubble which is about to burst: forcing issuance of loans to high risk borrowers.
sub prime mortgage: the government says minorities are disproportionately denied mortgages, enacts rules that force high risk loans aka subprime lending, IE: people can get a loan for the DP and a loan for the mortgage, people can get a reasonable loan with a sub 600 FICO score, people can get a high value mortgage loan with a low income. This increased the market demand that led to artificially high housing speculation. The discovery of the repackaging of those loans is what caused it to all crash down but it was already primed for collapse.
student loans: government states everyone should be able to go to college. But banks dont lend 18 year olds $100k who have no collateral or credit history. Its high risk. The government states they will buy the loan if the student defaults, removing the risk to the banks. The banks issue out loans like candy, colleges know the tuition will be paid either way, by the student or the government so they jack up prices, 400% over the last 20 years. College tuition speculation will come crashing down soon too.
And Biden wanting to do away with credit scores all together will make the same things happen in all financial aspects, not limited to mortgages or student loans.
This will cause a global financial crisis. This very thing is what happened in the sub-prime mortgage crisis in 08/09 and the student loan bubble which is about to burst: forcing issuance of loans to high risk borrowers.
sub prime mortgage: the government says minorities are disproportionately denied mortgages, enacts rules that force high risk loans aka subprime lending, IE: people can get a loan for the DP and a loan for the mortgage, people can get a reasonable loan with a sub 600 FICO score, people can get a high value mortgage loan with a low income. This increased the market demand that led to artificially high housing speculation. The discovery of the repackaging of those loans is what caused it to all crash down but it was already primed for collapse.
student loans: government states everyone should be able to go to college. But banks dont lend 18 year olds $100k who have no collateral or credit history. Its high risk. The government states they will buy the loan if the student defaults, removing the risk to the banks. The banks issue out loans like candy, colleges know the tuition will be paid either way, by the student or the government so they jack up prices, 400% over the last 20 years. College tuition speculation will come crashing down soon too.
And Biden wanting to do away with credit scores all together will make the same things happen in all financial aspects, not limited to mortgages or student loans.