HUD suspends FHA mortage insurance rate

 

An hour after Donald Trump assumed the presidency Friday, the Department of Housing and Urban Development indefinitely suspended a pending rate cut for mortgage insurance required for FHA-backed home loans.

The move — one of the first acts of his presidency — reverses a policy announced in the waning days of the Obama administration that would have trimmed payments for borrowers by hundreds of dollars a year.

HUD suspends FHA mortage insurance rate cut an hour after Trump takes office – LA Times

Some Republicans, however, expressed concern that the rate cut could cost taxpayers if the mortgages started to go sour and the Federal Housing Administration was unable to cover the losses. FHA-backed loans have seen explosive growth in recent years.

In his confirmation hearing, Trump’s nominee for HUD secretary, Ben Carson, said that if confirmed he would work with the “FHA administrator and other financial experts to really examine that policy.”

HUD suspends FHA mortage insurance rate cut an hour after Trump takes office – LA Times

In a letter announcing the suspension, HUD, which oversees the FHA, said more analysis is needed on any “future adjustments” to insurance premium rates.

“FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers,” the letter to the real estate industry said.

The rate cut, announced by the Obama administration earlier this month, was set to take effect on Jan. 27.

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