My recent post for Magnify Money on Trump’s reversal of the FHA mortgage insurance rate cut was picked up by several NBC affiliates. That’s a first for me!For this piece, I spoke to David Reiss, a law professor at the Center for Urban Business Entrepreneurship at Brooklyn Law School, as well as Heather McRae, a loan officer at Chicago Financial Services.
It’s hard to understand why Trump reversed the rate cut, other than reversing on principal a move Obama made during his final days in office. This tidbit was cut out of the final piece, but an independent actuarial report cited in the Financial Status of the FHA Mutual Mortgage Insurance Fund FY 2016 report, dated November 15, 2016, noted that the fund’s capital ratio increased from 2.07% to 2.32% between FY 2015 and FY 2016.
As David Reiss informed me, the fund is required to maintain a 2% capital ratio. It exceeded that level in 2015 and increased in 2016, even after the Obama administration reduced mortgage insurance premiums by 0.50 percent in January of 2016, a move said to save homeowners an average of $900 per year.
Head over to 12News.com to check out the full story. Do you agree with Trump’s move?