Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

President Donald Trump got right to work on Friday following his inauguration. (Screenshot: CNN)

In First Hour, President Trump Delivers 'Punch in the Gut to Middle Class'

"Today's action is all the proof we need to know whose side the Trump administration is on"

Deirdre Fulton, staff writer

About an hour after President Donald Trump was sworn in on Friday, his administration suspended indefinitely a scheduled cut in mortgage insurance premiums—effectively raising costs for middle-class borrowers by about $500 a year. 

The drop in rate, which was announced January 9 and supposed to go into effect on January 27, had been lauded as an opportunity to make homeownership more accessible to an estimated one million first-time and low-to-middle-income borrowers.

"Donald Trump's inaugural speech proclaimed he will govern for the people, instead of the political elite. But minutes after giving this speech, he gave Wall Street a big gift at the expense of everyday people."
—Liz Ryan Murray, People's Action

"After four straight years of growth and with sufficient reserves on hand to meet future claims, it's time for [the Federal Housing Administration or FHA] to pass along some modest savings to working families," said former Housing and Urban Development Secretary Julián Castro when the plan was announced.

That opportunity may now be lost.

CNBC described Friday's move as "one of the Trump [administration's] first orders," and the Department of Housing and Urban Development sent out a release (pdf) dated Friday announcing the suspension of the rule "effective immediately."

However, incoming press secretary Sean Spicer said the newly sworn-in president signed just three orders on Friday: a waiver allowing his defense secretary pick, Marine Gen. James Mattis, to lead the Pentagon; his formal cabinet nominations to the U.S. Senate; and the proclamation of a "National Day of Patriotism"—with no mention of the scheduled mortgage rule. 

Regardless of how the suspension was implemented, housing advocates decried the decision.

"President Trump campaigned as the candidate who would stand with the forgotten American worker, but of all of the actions he could have taken on his first day in office, it's telling that his administration has moved to instead make it more expensive for Americans to buy a home this year and beyond," said Sarah Edelman, director of housing policy at the Center for American Progress. "With mortgage interest rates already on the rise, reversing the FHA's move to cut insurance premiums in fact puts the dream of homeownership farther out of reach for millions of hardworking Americans."

"President Trump campaigned as the candidate who would stand with the forgotten American worker, but of all of the actions he could have taken on his first day in office, it's telling that his administration has moved to instead make it more expensive for Americans to buy a home this year and beyond."
—Sarah Edelman, Center for American Progress

Indeed, Politico reports, "[t]he National Association of Realtors said the Trump administration's reversal could keep as many as 40,000 would-be homebuyers out of the market this year."

Furthermore, David Dayen writes at The Intercept, "by making FHA loans more expensive, traditional bank mortgages become more competitive. Banks typically earn more in profit from of their own products than from FHA loans. So this initial Trump policy also generates a competitive advantage for mortgage lenders to make more money for their business."

In other words, declared Liz Ryan Murray, policy director for national grassroots advocacy group People's Action, the move is "a windfall for Wall Street" that contradicts Trump's populist rhetoric.

"Donald Trump's inaugural speech proclaimed he will govern for the people, instead of the political elite," she said. "But minutes after giving this speech, he gave Wall Street a big gift at the expense of everyday people. Trump may talk a populist game, but policies like this make life better for hedge fund managers and big bankers like his nominee for Treasury, Steven Mnuchin, not for everyday people."

Edelman added: "So-called reckless homeowners didn't cause the housing crisis—but predatory lenders who tricked consumers into mortgages with exploding interest rates and other harmful features did. More than seven million Americans lost their homes during the foreclosure crisis, largely because of predatory mortgages and incompetent servicing practices. As we were reminded yesterday at Steve Mnuchin's Senate confirmation hearing, Trump's own Treasury secretary nominee made millions from the crash, and today's action is all the proof we need to know whose side the Trump administration is on."

She and other observers weighed in on the implications of Trump's Hour One action online:


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
We need your help.

Support progressive journalism.

Common Dreams is not your average news site. We don't survive on clicks or advertising dollars. We rely entirely on your support. And without it, our independent progressive journalism simply wouldn’t exist. Every gift of every amount matters.

Join the fight and support our common dreams today.

Summit Participants Embrace 'Vaccine Internationalism' to End Pandemic

"Our goal is simple: to end the pandemic as quickly as possible by securing Covid-19 vaccines for all," says the coordinator of Progressive International's four-day virtual summit.

Brett Wilkins, staff writer ·


As Iran Elects New President, Experts Urge Biden to Rejoin Nuclear Deal, Lift Sanctions

"The Biden administration must remain resolute and seek a break from the disastrous conditions that helped contribute to this result."

Brett Wilkins, staff writer ·


UN General Assembly Condemns Myanmar Junta Violence, Urges Arms Embargo

Member nations voted 119-1 in favor of the resolution, which also calls for a return to the country's fragile democracy.

Brett Wilkins, staff writer ·


Dems Introduce Abolition Amendment to Scrap Constitution's 'Slavery Clause'

"The loophole in our Constitution's ban on slavery not only allowed slavery to continue, but launched an era of discrimination and mass incarceration that continues to this day," said Sen. Jeff Merkley.

Julia Conley, staff writer ·


'Surreal' and 'Distressing': Climate Experts' Predictions Come True With US Heatwave

"The current heatwave and drought leave no doubt, we are living the dangerous effects of the climate crisis."

Jessica Corbett, staff writer ·