Mortgage Insurance Premium Changes1 min read

I posted this elsewhere and am posting here with minor changes.
So, there are two extremes here. Mortgage insurance being free or the program not existing at all.

We’re currently between those two things. The question is where the right point is to be at. This 25 basis point reduction by the Obama administration would have taken effect on January 27.

It is worth discussing how this program should be administered. You would expect this kind of action from an incoming administration.

I don’t think it is as simple of a “Trump is screwing you” thing as it is being made out to be. It’s a good headline grabber by the pussy grabber, but like most things isn’t very substantive.

I’d actually go so far as to say that most articles I am seeing on this are horribly biased and meant to get clicks. They lack a ton of details and makes it sound like he is increasing mortgage insurance premiums. He isn’t.

http://www.marketwatch.com/story/after-mortgage-rate-spike-fha-to-cut-insurance-premium-2017-01-09

http://www.marketwatch.com/story/trump-already-suspends-obama-era-fha-mortgage-insurance-cut-2017-01-20

Important info that is being left out elsewhere:

Congress requires that FHA have enough reserves to cover projected losses over 30 years. In 2013, it fell short on that threshold and had to receive a cash bailout of $1.7 billion. Separately, the agency must maintain the fund’s net worth of at least 2% of its loan portfolio.
In a statement, FHA noted that the reserve ratio stood at 2.32% last year, the second year in a row to exceed the 2% threshold.

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