The rule, due to go into effect Jan. 1, would let the Federal Housing Administration charge higher premiums on mortgages it insures for low- and middle-income borrowers with poor credit.Borrowers who pose less of a credit risk would pay less.

The rule would impose a disproportionate burden on black homebuyers, Congress’s Government Accountability Office said in a July report. About 32 percent of current black borrowers would be disqualified from the program, and another 40 percent would pay higher premiums, the report said. About 79 percent of FHA-insured loans went to first-time homebuyers in 2006.

Sen. Elizabeth Dole, the N.C. Republican leading the effort to block the rule change, “is concerned because the rule would make it more expensive for low-income and minority citizens to buy their first homes,” her spokeswoman, Amy Auth, said last week.

Dole last week attached an amendment to a housing bill that would stop the rule from going into effect for a year. The other sponsors of the amendment were Connecticut Democrat Chris Dodd, the chairman of the Senate Banking Committee, and Richard Shelby of Alabama, the committee’s ranking Republican.

Charlotte Observer

This has absolutely nothing to do with black people or white people or purple people. It is all about folks with bad credit. The primary reason we are seeing this sub-prime mortgage meltdown going on is because of the Federal Government putting pressure on lenders to relax their standards and hand out all of these adjustable rate mortgages to people who really shouldn’t have qualified. Suddenly, when the low interest rates start going up people are in shock and awe that these people can’t keep up the payments and are defaulting left and right on their loans. Imagine that.

The Bush Administration is actually doing something right here by allowing lenders to charge a high risk premium to these buyers as a type of insurance to keep the industry from continuing to crumble and instead of supporting this these two idiots are pandering to a group that won’t vote for them anyway, by throwing down the race card. It’s pathetic and it’s a crock.

The Feds created the sub-prime problem and now that a reform is in the midst you got more of them standing in the way of that. Working in North Carolina, I am becoming increasingly tired of Liddy Dole and I think it’s about time she hangs up her hat. As far as Shelby, he’s always been a borderline RINO in a state where we should have another solid conservative like Sessions.

Under the new rule, it could charge a risky homebuyer as much as $228 a year more on a $130,000 loan, the average cost of an FHA mortgage, said Brian Montgomery, the Assistant Secretary of the Department of Housing and Urban Development, which oversees the FHA.

That’s $19 more a month.  If they can’t handle that they shouldn’t be given a mortgage!