The Federal Housing Administration (FHA) says it has no plants to lower its mortgage insurance premiums, despite recent pleas from housing industry groups.
FHA Commissioner Carol Galante told attendees at a Mortgage Banker’s Association Washington Policy Conference this week that “now is not the right time to do a wholesale rollback of mortgage insurance premiums,” according to National Mortgage Professional.
Galante’s statement emphasized that the agency is still working to achieve its required 2% capital ratio for its Mutual Mortgage Insurance Fund, which retained a value of negative $1.3 billion as of December 2013.
She also stressed that her agency is working to strengthen both the MMI Fund and also find other ways to increase access to credit for homeowners.
Such alternative measures Galante shared during the conference included developing performance metrics to reward lenders for extending credit to lower-score borrowers, as well as moving ahead with a housing counseling program dubbed Homeowners Armed With Knowledge, which aims to reward FHA borrowers that receive counseling.
The announcement arrives on the heels of a letter sent to the FHA from the National Association of Realtors (NAR), whose president, Steve Brown, urged Commissioner Galante to lower the agency’s MIPs to facilitate greater access to homeownership for thousands of homeowners who have been “priced out” under current FHA premiums.
In his letter, Brown estimates that FHA premiums as they are today may have priced out between 125,000 to 375,000 home buyers.
Written by Jason Oliva