President Trump has made his very first executive action. The action was to block an Obama administration order that would have reduced the cost of mortgages for millions of home buyers.
Following up on an article from last week where we told you about a mortgage-fee reduction the Obama administration announced January 9 and was supposed to go into effect on January 27.
The 0.25 percentage point premium rate cut for Federal Housing Administration-backed loans would have saved the average borrower about $500 per year and cushioned the market against rising rates.
The Federal Housing Administration (FHA), part of HUD, offers mortgage insurance, often to first-time home buyers and those on low incomes. The insurance protects lenders in case of defaults. HUD says by cutting the premiums it would help about 1 million households.
A press release issued early this week says, that the reduction in insurance premiums “has been suspended indefinitely…and the FHA will issue a subsequent Mortgagee Letter at a later date should this policy change.”
We’ll just have to wait for more information because when asked for more information, a HUD spokesman referred back to the letter, which said that “more analysis and research are deemed necessary.”