Trump blocks Federal Housing Administration plan to cut mortgage fees
01/20/17 01:29 PM EST
Updated 01/20/17 03:25 PM EST
The Trump administration has suspended a fee cut on mortgages backed by the Federal Housing Administration.
“FHA is committed to ensuring its mortgage insurance program remains viable and effective in the long term for all parties involved, especially our taxpayers,” the Department of Housing and Urban Development told lenders in a letter today. “As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.”
Earlier this month, the Obama administration moved to lower mortgage fees beginning Jan. 27, a week after Donald Trump’s inauguration. Mortgage lenders, builders and real estate agents endorsed the move, saying it would help first-time and lower-income borrowers.
Today, the industry was left to wonder if the Trump move was a routine review of Obama policy or an outright rejection of it.
“Based on the prior administration’s lack of communication on the FHA premium reduction, we believe the decision to review such action prior to implementation is prudent,” said Scott Olson, executive director of the Community Home Lenders Association. “We are confident the review will support a premium cut.”
The National Association of Realtors said the Trump administration’s reversal could keep as many as 40,000 would-be homebuyers out of the market this year.