Obama to Reduce Mortgage Insurance Premiums

From RealTrends.com: The Obama Administration is directing, via executive action, the Federal Housing Administration to reduce annual mortgage insurance premiums by 50 basis points, from 1.35% to 0.85%, according to HousingWire.com.

According to Steve Murray, founder of REAL Trends, “The President’s action to reduce the cost associated with FHA loans will lower costs for low income and first time homebuyers. The FHA fees were originally increased to attempt to stabilize the financial health of FHA, so one must assume that the President and his advisors have concluded that FHA no longer needs the extra fee income to protect its balance sheet. For the short term this is a positive development for the housing market.”

The White House statement says that the typical first-time homebuyer, this reduction will translate into a $900 reduction in their annual mortgage payment.

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