FHA Increases Mortgage Insurance Premium
Posted by Benjamin Dona on Sunday, February 20th, 2011 at 9:18pm.
You had to know this was coming after Fannie and Freddie announced their home loan fee increases.
Beginning April 18th, 2011, FHA will raise its monthly Mortgage Insurance Premium (MIP) by 25 basis points. For the average FHA borrower, the increase will equate to about an additional $30 per month.
According to HUD's spokesman, the increase was necessary for the following two reasons. First, FHA's capital reserves are currently below a mandated minimum set by the legislature, and the fee increase will help the agency comply with the law. Second, HUD hopes to steer more buyers away from FHA loans and into the private sector by making an FHA loan less desirable.
How commendable on their part.
And so it goes in the mortgage industry. More costs, less choices and government legislators and regulators patting themselves on the back that they are finally bringing things under better control.
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