“FHA May Hike Premiums on High Balance Loans”
The last thing that the consumer needs is an increase in premiums when buying or refinancing higher loan amounts. Why do it now? The continued talk in the media by the administration, is that we need to do everything humanly possible to improve our economy. Don’t they realize that housing is a major portion of our economy? Wouldn’t it make more sense, to even lower these fees to assist potential homeowners to get into housing, instead of figure out ways to slow housing purchases?
HUD Secretary: FHA May Hike Premiums on High Balance Loans
The Federal Housing Administration is considering raising insurance premiums on loans above $625,500, according to HUD secretary Shaun Donovan.
In testimony before a House committee on Thursday, the Housing and Urban Development secretary said FHA is looking at how it should price premiums for higher balance loans of up to $729,750.
Donovan said HUD's fiscal year 2013 budget will include "specific proposals about how we move forward with those loans." The agency's annual budget proposal typically is published in February.
Congress recently restored FHA's maximum loan to $729,750, but left the Fannie Mae/Freddie Mac cap at $625,500.
HUD expects the move will push more business to FHA.
The secretary noted that the performance of higher balance FHA loans has been good thus far. The main reason for increasing the insurance premium or adopting other policies would be to "encourage private capital to come back" to the jumbo market.
The secretary also revealed the HUD is going to publish an indemnification rule in the "very near future" to hold FHA lenders responsible for bad loans.
"In addition, we will soon publish a rule that reduces allowable seller concessions to protect the Mutual Mortgage Insurance Fund from risks associated with inflated appraisal values," he testified.
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Email: joe@righttracfg.com
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
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