In its first executive action last Friday, within the hour after Trump took the oath of office, his administration suspended the implementation of a rule that would have reduced the cost of mortgage insurance for FHA-backed loans. The backing helps first-time buyers, people with poor credit, and those who lack funds for a 20% down payment obtain private loans.
About 16% of new mortgages are FHA insured. The premium rate would have been reduced from 0.85% to 0.60%, saving borrowers about $29 monthly on a $200,000 mortgage.
The FHA is getting a $1.7 billion bail out from the Treasury. Seems those reverse mortgages have managed to accrue $5 billion in losses. The news was disclosed in a letter to Congress, not even a press release. Most of us know the drill. Have to issue news but want no one to read it? Release it at 5pm on a Friday.
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