After two years of premium increases, the forward FHA single-family program is cash flowing again and HUD is putting its foot down on further increases.
“We do not need to go farther on price increases,” HUD secretary Shaun Donovan told members of the Mortgage Bankers Association.
“We do not need changes that would increase the cost of FHA mortgages for new borrowers or threaten the housing recovery we are seeing,” he said Wednesday.
The HUD secretary noted the FHA fund has a $4 billion surplus. “You can see that we have taken the responsible steps necessary on our forward program to protect” the FHA mortgage insurance fund.
Donovan stressed that more needs to be done to shore up the FHA reverse mortgage program.
Meanwhile, FHA needs to continue to reinforce and accelerate the recovery in housing and jobs.
To that end, the HUD secretary wants to increase access to credit by clarifying representations and warranties to make them more “transparent and reliable” for FHA lenders. “We hope we can align that with Fannie Mae and Freddie Mac,” he said at the MBA’s Washington conference.
The HUD secretary also wants to fix Credit Watch so that FHA lenders with a delinquency rate below “X” will not be penalized and they feel comfortable lending to more borrowers with less-than-pristine credit profiles.
HUD also is working with the Consumer Financial Protection Bureau to provide
