Senator Rick Scott (R-FL) is sounding the alarm about the state of the U.S. housing market, blaming the Biden administration for creating a looming subprime mortgage crisis through reckless Federal Housing Administration (FHA) policies.
In a letter sent Friday to Housing and Urban Development Secretary Scott Turner, Scott praised the Trump administration’s early steps to reverse those policies and called for urgent reforms to protect low-income homeowners and taxpayers.
Scott thanked Turner — appointed by President Donald Trump earlier this year — for taking swift action to unwind what he described as “harmful Biden-era housing policies” and expressed support for the administration’s efforts to restore stability to the housing market.
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In the letter, Scott cited alarming data showing that nearly two-thirds of FHA-backed borrowers in 2024 had debt-to-income ratios exceeding 43%, with some reaching as high as 57%. He compared these figures to conditions leading up to the 2008 housing crisis, warning that many borrowers were being set up for financial failure.
“The Biden-Harris administration left a ticking time bomb in our housing market,” Scott wrote. “They allowed heavily debt-burdened borrowers to take on more debt, and provided a government guarantee for those mortgages. The result is a spike in serious delinquencies we haven’t seen since 2008.”
Scott particularly criticized the FHA’s “Payment Supplement” policy, introduced in February 2024, which allows the agency to cover missed mortgage payments and reduce borrowers’ monthly payments for up to three years. While intended to prevent foreclosures, the missed payments and reduced payments are tacked onto the principal, increasing the overall debt load and, in many cases, exceeding the value of the home.
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“This only delayed and worsened the consequences for homeowners,” Scott stated. “It trapped borrowers in a growing debt spiral — and left U.S. taxpayers on the hook.”
Scott argued that the policy not only pushed vulnerable families deeper into debt but also constrained the already-tight housing supply by preventing homes from reentering the market through foreclosure.
Calling for immediate reform, Scott urged Secretary Turner to return to “fiscally prudent underwriting standards” and to begin dismantling the Payment Supplement program to avoid a “calamitous flood of foreclosures.”
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“The American dream of homeownership should not come with a government-sponsored trapdoor,” Scott said. “President Trump and Secretary Turner are right to act fast to clean up this mess. We must ensure that federal housing policy supports families — not burdens them with debt they cannot afford.”
Neither the Department of Housing and Urban Development nor the FHA has publicly responded to Scott’s letter. Housing policy has become a central focus of the Trump administration’s early economic agenda as it seeks to stabilize markets following what it calls “Biden’s inflationary legacy.”
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