CHLA: Budget Numbers Show FHA is Continuing to Overcharge Borrowers
$30 million Technology Fee should instead come out of $7.1 billion in Net FHA Profits;
FHA premiums Should be Reduced and Life of Loan Premiums Ended
Contact: Scott Olson For Immediate Release
571-527-2601 May 23, 2017
In the wake of the Administration’s release of its FY 2018 HUD budget, the Community Home Lenders Association (CHLA) today released the following statement:
“The projected $7.1 billion in net profits on new FHA loans next year shows that FHA borrowers, particularly 1st-time homebuyers, continue to be overcharged,” said Scott Olson, CHLA’s Executive Director. “CHLA therefore renews its call to cut annual premiums and to end the current Life of Loan premium policy. And while CHLA supports $30 million for new FHA Technology, it believes this should be funded out of this large FHA surplus, instead of creating a new fee that will be passed along to homebuyers.”
The HUD budget that was released this morning projects that FHA will make a net profit of 3.18% on each new FHA forward loan insured in FY 2018 [see Page 570, HUD Appendix]. And overall, all of the FHA single family loan programs are projected to produce a net profit of $7.1 billion for taxpayers. These numbers are OMB’s projection of the net present value of all premiums and losses on newly insured FHA loans in FY 2018.
This comes at a time when last November’s FHA Actuarial Report shows that the FHA forward loan program reached a net worth of in excess of 3%, well in excess of its Net Worth Requirement, and at a time when early default rates are at historically low levels.
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