mortgage insurance premiums — but the chairman of the House Financial Services Committee isn’t happy about the move.
The FHA is reducing its premiums from 0.85% to 0.60%, a move which real estate professionals say will put homeownership within reach for more people.
“The high cost of mortgage insurance has unfortunately put those opportunities out of reach for many young, first-time- and lower-income borrowers. Now, we have a real opportunity to get back on track,” said William E. Brown, president of the National Association of Realtors.
But Financial Services Committee Chairman Jeb Hensarling (R-Texas) said that the move was “cynical” and put taxpayers at risk.
“It seems the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk of footing the bill for yet another bailout,” Hensarling said. “Just three years ago the taxpayers had to spend $1.7 billion to bail out the FHA. Lowering premiums to below market rates now only puts the FHA in a more precarious financial condition.”
Hensarling said the administration was “playing politics” with the FHA in a way that endangered the agency’s integrity.
“To be successful, the FHA must be fiscally sound, with a clearly defined mission, to ensure homeownership opportunities for creditworthy first-time homebuyers and low-income families,” he said. “Lowering FHA premiums now is counterproductive to achieving these goals and puts the U.S. taxpayer at greater risk.”
Mortgage insurance premiums are coming down
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Many in the mortgage and real estate community are praising the recent Obama administration decision to lower