Copyright MSNBC
There’s been some sporadic talk in conservative circles about the introduction of new, 50-year mortgages for Americans looking to buy a home, but it seemed easy to dismiss and difficult to take seriously. That is, until the White House threw its public support behind the policy. On Saturday, Bill Pulte, the Trump loyalist who leads the Federal Housing Finance Agency, announced via social media that the Republican administration is working on making 50-year mortgages available — a move the FHFA director described as “a complete game changer.” Two days later, during Donald Trump’s latest Fox News interview, for example, host Laura Ingraham asked whether a 50-year mortgage is “really a good idea.” The president responded as if a half-century-long mortgage was a modest change from the status quo. “I mean, you know, you go from 40 to 50 years,” the Republican said, overlooking the fact that 40-year mortgages are practically unheard of for most consumers. He added, “All it means is you pay less per month. You pay it over a longer period of time.” The following morning, Kevin Hassett, the director of the White House National Economic Council and one of the most influential voices in Trump’s inner circle on economic policy, appeared on CNBC and touted 50-year mortgages as a “really good” idea. It’s really not. On the surface, I can appreciate the superficial appeal: Those with 50-year mortgages (to the extent that such a thing ever became available) could expect to make smaller monthly payments than those with standard 15- or 30-year mortgages. But just below the surface, there’s a lengthy list of problems. Homeowners who take on 50-year mortgages would end up paying far more, building equity far more slowly than those with traditional mortgages, and just as importantly, paying higher interest rates. What’s more, a CNBC report added that a 50-year mortgage “does not currently meet the definition of a qualified mortgage” under federal law, and a related Washington Post report added, “Implementing such a policy would also require tedious changes from regulators, plus buy-in from lenders and the broader housing finance industry.” In other words, no one should expect to see such a policy implemented anytime soon. But as the public conversation and political debate advances, a related question hangs overhead: How exactly did Trump come to endorse such an idea in the first place? Politico reported on Pulte’s role in securing presidential buy-in. On Saturday evening, Pulte arrived at President Donald Trump’s Palm Beach Golf Club with a roughly 3-by-5 posterboard in hand. A graphic of former President Franklin Roosevelt appeared below ‘30-year mortgage’ and one of Trump below ‘50-year mortgage.’ The headline was ‘Great American Presidents.’ Roughly 10 minutes later, Trump posted the image to Truth Social, according to one of the people familiar, who was with the president at the time. The Politico report, which has not been independently verified by MSNBC, added that White House officials “are furious” with Pulte for putting a misguided idea in Trump’s head and sparking “a furious backlash from conservative allies, business leaders and lawmakers.” The same article added, “The episode underscores the haphazard ways consequential policies are sometimes brought before the president, and how Trump’s govern-by-whim nature can backfire.” And therein lies the larger point. It is, to be sure, a problem that the White House stumbled into extending its imprimatur to a misguided idea on housing policy. But stepping back, it’s just as serious a problem that the White House doesn’t have a robust policymaking process in place in the first place. What it has instead are unqualified loyalists who persuade an unqualified president to embrace ill-advised policies without forethought, analysis or due diligence. There’s no reason to expect this governing model to change anytime soon.
