Newsroom
January 20, 2016
Long talks FHA premium cuts in American Banker
NAFCU Chief Economist and Director of Research Curt Long said an additional Federal Housing Agency premium cut would "bolster" the housing market in a recent interview with American Banker.
"The housing market is still struggling as many Americans, particularly first-time buyers, simply cannot afford the cost of home ownership," Long was reported saying. "Cutting FHA premiums bolsters the housing market and would be welcomed by credit unions as they continue to serve their 102 million member-owners."
American Banker noted that the Obama administration is preparing its final budget but that some financial industry representatives are divided over whether it should make another reduction in FHA premium charges on single-family loans.
Last year, the Department of Housing and Urban Development cut the FHA's annual premium by half a percentage point. NAFCU strongly supported the move, as it helped make mortgages more affordable to more consumers and further advanced the housing recovery.
In November, the FHA announced its Mutual Mortgage Insurance Fund had exceeded its 2 percent statutory capital requirement for the first time since 2008, reaching 2.07 percent. At the time, FHA Principal Deputy Assistant Secretary Ed Golding said there were no plans to change the mortgage insurance premium or the mortgage insurance premium structure.
American Banker said the FHA "appears to be leaning against a further cut for now." The paper also cited analysts saying a cut may not come at the beginning of the year, but could be more likely in the second half of 2016.
"The housing market is still struggling as many Americans, particularly first-time buyers, simply cannot afford the cost of home ownership," Long was reported saying. "Cutting FHA premiums bolsters the housing market and would be welcomed by credit unions as they continue to serve their 102 million member-owners."
American Banker noted that the Obama administration is preparing its final budget but that some financial industry representatives are divided over whether it should make another reduction in FHA premium charges on single-family loans.
Last year, the Department of Housing and Urban Development cut the FHA's annual premium by half a percentage point. NAFCU strongly supported the move, as it helped make mortgages more affordable to more consumers and further advanced the housing recovery.
In November, the FHA announced its Mutual Mortgage Insurance Fund had exceeded its 2 percent statutory capital requirement for the first time since 2008, reaching 2.07 percent. At the time, FHA Principal Deputy Assistant Secretary Ed Golding said there were no plans to change the mortgage insurance premium or the mortgage insurance premium structure.
American Banker said the FHA "appears to be leaning against a further cut for now." The paper also cited analysts saying a cut may not come at the beginning of the year, but could be more likely in the second half of 2016.
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