The Mortgage Bankers Association (MBA) has recently urged the White House and the Federal Housing Administration to lower annual Mortgage Insurance Premiums (MIP) in light of the historically low level of housing affordability and the way that rising consumer prices disproportionately affect lower- and middle-income families.
In a letter to the National Economic Council, the mortgage trade organization claimed that the combination of high mortgage rates on Tuesday reached 6.28%, and housing prices above $400,000 placed a significant burden on prospective LMI and first-time homeowners. According to MBA data, the average national mortgage payment in July was $1,844, up more than $460 just in the first seven months of this year.
The MBA pointed out in its letter that the Mutual Mortgage Insurance Fund (MMIF) capital reserve ratio for the FHA is four times the statutory minimum reserve ratio. In addition, the MBA noted that the FHA’s primary delinquency rate reverted to pre-pandemic lows of 4.64% at the end of the second quarter, putting it at more than 8% today, four times the statutory minimum reserve ratio.
By cutting monthly payments and immediately placing money into homebuyers’ pockets each month, lowering the MIP, with an emphasis on FHA’s recurring “annual” premium, boosts their purchasing power, enabling them to become homeowners and pass down wealth to future generations.
The MBA stated that lowering MI premiums would aid FHA products in maintaining their competitiveness in the current market. The CHLA noted in its May letter that the Biden administration would be unable to achieve its goals of enhancing racial equity and raising homeownership without lowering premiums.
Although she has not done so as FHA commissioner, Julia Gordon appeared before Congress as a private individual pushing for lower mortgage insurance premiums. In 2015, the Obama administration cut the premiums from 1.35% to.85%, which was the most recent decrease. To read more on this, click here.
https://www.housingwire.com/articles/mba-urges-white-house-to-cut-mi-premiums/
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