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January 07, 2015
NAFCU to FHA: Lower mortgage premiums
NAFCU and other organizations jointly urged the Federal Housing Administration to reduce the cost of single-family mortgage insurance premiums so more borrowers are able to afford mortgages.
NAFCU strongly supports this change, which would help make mortgages more affordable to more consumers and further advance the housing recovery.
President Barack Obama is expected to announce a 50-basis-point cut in the annual FHA insurance premium in remarks today.
As noted in Wednesday's letter, annual insurance premiums have increased by almost 150 percent since 2011. The number of families purchasing homes with FHA-insured mortgages is 44 percent below the historic norm.
"In recent years, a combination of strong management, significant premium increases, and improvement in the economy has put the agency well on track to meet its capital reserve requirement by 2016, while policy changes to reduce risk layering have helped decrease risk," NAFCU and other letter signatories said Wednesday. "However, considering FHA's significant drop in volume and market share in recent years, it appears that the premium increases have kept many potential borrowers on the sidelines."
The letter also noted the cost of the housing crisis to the agency's capital reserve, but it said, "We believe it is now time for FHA to enable more households to access homeownership by reducing mortgage insurance premiums while still maintaining fiscal prudence and continuing the trajectory toward full replenishment of the fund."
Other signers on the letter included the Community Mortgage Lenders of America, Habitat for Humanity International, the Mortgage Bankers Association and the National Urban League.
NAFCU strongly supports this change, which would help make mortgages more affordable to more consumers and further advance the housing recovery.
President Barack Obama is expected to announce a 50-basis-point cut in the annual FHA insurance premium in remarks today.
As noted in Wednesday's letter, annual insurance premiums have increased by almost 150 percent since 2011. The number of families purchasing homes with FHA-insured mortgages is 44 percent below the historic norm.
"In recent years, a combination of strong management, significant premium increases, and improvement in the economy has put the agency well on track to meet its capital reserve requirement by 2016, while policy changes to reduce risk layering have helped decrease risk," NAFCU and other letter signatories said Wednesday. "However, considering FHA's significant drop in volume and market share in recent years, it appears that the premium increases have kept many potential borrowers on the sidelines."
The letter also noted the cost of the housing crisis to the agency's capital reserve, but it said, "We believe it is now time for FHA to enable more households to access homeownership by reducing mortgage insurance premiums while still maintaining fiscal prudence and continuing the trajectory toward full replenishment of the fund."
Other signers on the letter included the Community Mortgage Lenders of America, Habitat for Humanity International, the Mortgage Bankers Association and the National Urban League.
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