Secretary of the U.S. Department of Housing and Urban Development (HUD) Marcia Fudge said the agency had no “near-term” plans to change the Federal Housing Administration (FHA) mortgage insurance premium pricing.
“The health of FHA’s Mutual Mortgage Insurance Fund has remained resilient despite the financial challenges faced by homeowners with FHA-insured mortgages in 2020,” Fudge said in a release. “The fund stands at more than $80 billion and remains well above the 2 percent minimum capital reserve required. Through the pandemic, the FHA portfolio has experienced increased levels of seriously delinquent loans and a heightened level of loans in forbearance. We continue to monitor mortgage performance trends within our portfolio, particularly related to those homeowners who are struggling financially because of the pandemic.”
Fudge said the decision to leave the premium pricing unchanged was because of the current FHA delinquency crisis and HUD’s duty to manage risks and the overall health of the fund.
Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit applauded the department’s position.
“MBA commends Secretary Fudge for maintaining FHA’s current mortgage insurance premium pricing until we have a clearer picture of the long-term impact of the pandemic on FHA borrowers and the insurance fund,” he said. “While it is desirable to have lower mortgage financing costs, particularly as rates rise and home prices continue to increase, we agree with HUD that we need more data about how the more than 1 million FHA loans that are delinquent perform as they exit COVID-19-related forbearance.
“We look forward to continuing to work with Secretary Fudge on ways to protect FHA borrowers and ensure the overall stability of the FHA program,” he concluded.