Lenders protest proposed FHA fee for risk upgrades
National Mortgage News reports on May 23 2017, 4:14 pm EDT
WASHINGTON — Lenders are objecting to the Trump administration’s proposed $30 million fee designed to partially fund upgrades to the Federal Housing Administration.
While the mortgage industry agrees that the FHA should upgrade its risk management system, representatives argue that the budget shows the agency is making enough money on its own to bear the cost of the improvements.
This should be funded out of the large FHA surplus, “instead of creating a new fee that will be passed along to homebuyers,” Scott Olson, executive director of the Community Home Lenders Association, said in a press release Tuesday.
The president’s budget will “put more Ohio children, families and seniors at risk of losing their homes, and I will do everything in my power to make sure it never becomes law,” said Sen. Sherrod Brown, D-Ohio.
The budget proposal foresees a $160 million risk management program at the FHA, $30 million of which would be funded by a fee on the industry.
But the proposal also envisions the FHA making a $7.1 billion profit in fiscal year 2018, while guaranteeing $213.9 billion in new single-family loans.
Overall, the Trump administration is asking Congress to approve $40.7 billion in funding for the Department of Housing and Urban Development’s 2018 budget, down from $46.9 billion in the prior fiscal year.
The budget provides more than $35 billion in rental assistance programs, which will be used to support 4.5 million low-income households.
But the budget, which must be approved by Congress, also would eliminate several key housing programs, including the Community Development Block Grant program, HOME Investment Partnership Program, Choice Neighborhoods and the Self-Help Homeownership Opportunity Program. These programs help cities and towns meet the housing needs of their communities.
Trump’s budget also calls for eliminating the National Housing Trust Fund that is being funded by Fannie Mae and Freddie Mac.
The cuts have drawn the ire of Democrats. Sen. Sherrod Brown, D-Ohio, called the cuts “shortsighted, dangerous and immoral.”
The president’s budget will “put more Ohio children, families and seniors at risk of losing their homes, and I will do everything in my power to make sure it never becomes law,” Brown said.