FHA’s Galante: Government MI Premiums Near the ‘Tipping Point’ By George Brooks gbrooks@imfpubs The Department of Housing and Urban Development will not raise FHA mortgage insurance premiums for some time, fearing that further aggressive pricing could shut out traditional and first-time homebuyers. In recent testimony before the House Financial Services Committee, FHA Commissioner Carol Galante warned that, with interest rates rising, the FHA may have reached a “tipping point” with its mortgage insurance premiums and that it may be time to pull back and ponder the next move. “As we continue to seek a balance between strengthening the [Mutual Mortgage Insurance Fund] and ensuring access to credit, we must assess whether FHA premiums are set appropriately to account for risk to the fund without making the cost of credit prohibitive for qualified buyers,” she said. Since 2009, the FHA has increased premiums five times – the most recent coming on April 1, 2013. Altogether, the premium increases have yielded more than $10 billion in additional economic value for the fund, Galante noted. For more on the story, see the new edition of Inside FHA Lending, available online. Other areas of interest: Originations, Servicing, Regulatory, Ginnie Mae/FHA, Mortgage Lending & Servicing
Posted on: Thu, 07 Nov 2013 23:43:33 +0000