Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
0bama cut the MIP rate in December. The cut would've taken effect on January 27th, only for people obtaining new mortgages after that point.
Trump just cancelled the cut before it could take effect.
Nothing has been changed. 0bama attempted to put the government in a position where it would go bankrupt faster if people began defaulting on their FHA insured loans en masse. Prompting the gov to print more money, and go deeper in debt than it already is. It was just another shot by 0bama on his farewell destruction tour in the last month of his miserable, destructive Presidency.
Follow?, of course you don't, it's only an opportunity to bash Trump. We all get it. Lie, and obfuscate, because your communist overloads didn't win this round.
CN
This increased the cost of an FHA loan, for which I am in the market.
He also changed how PMI can be removed from a loan. It used to be once your equity reached 20% you could apply and get it removed. Now you have to refinance to get PMI gone.
THAT is what will cost people more money as interest rates have and will continue to rise. THAT if anything is what people should be a bit angry about.
Then that just takes it back to what it was 30 years ago. We had a FHA mortgage in 1987 with PMI. We hit 20% in about 10 or so years and had to refinance to remove it. We would have hit it sooner but there was that little housing bubble collapse no one remembers around 1991.
That's like saying retirement is not geared to age, because anyone can retire at 30.
Quote:
Furthermore, the government should not be assuming all the risk for people who sign up for loans they can't afford. Let the banksters take on some of it.
First, the government isn't assuming all the risk.
Second, this increase applies to both people who can afford it and those who cannot. Previous generations got generous housing subsidies, now they want to pull up the ladder, which is very typical of the selfish baby boomer generation.
They are not higher fees - they are the same fees. What's wrong with lower home prices? That is the biggest hurdle for buyers - not interest rates -- which are at historical 5000 year lows.
What's wrong with lower home prices?
That depends on your perspective, buyer vs seller as well as interest rates.
Exclusive of property taxes the monthly P&I payment on my first home is less than it was 35 years ago, despite modest annual appreciation. What usually matters is the monthly nut, which includes property taxes, when the purchase is financed.
Way back, before government got knee deep in the residential home market, a 50% down payment was common. The term of a mortgage was usually 5 years at which point the home owner/ borrower had the choice to refi at current interest rates or pay the note off. The borrower, not the lender, assumed the long term interest rate risk.
Despite this conservative lending approach, about 50% of home loans went into foreclosure during the Great Depression. Those banks that survived would not write new money mortgages.
When the private sector declines risk, the Federal Government rightly or wrongly, historically steps in to fill the gap. And that's what it did with the New Deal as it relates to mortgages and then with the VA loan benefit.
When a Government takes action to make home buying more affordable it tends to create new demand. When demand exceeds supply, home values increase beyond the rate of inflation. When supply exceeds demand, home values tend to decline.
There are trade offs. A higher rate of owner- occupied housing is generally good for a community and economy.
Owners of owner- occupied housing invest more in maintenance and upgrades which has a favorable impact on the economy.
That's like saying retirement is not geared to age, because anyone can retire at 30.
First, the government isn't assuming all the risk.
Second, this increase applies to both people who can afford it and those who cannot. Previous generations got generous housing subsidies, now they want to pull up the ladder, which is very typical of the selfish baby boomer generation.
Please tell us what "generous housing subsidies" you're talking about?
I am well aware what FHA is and how it works. Not only do taxpayers have to pay on the insurance portion of the loan if it defaults, - Fannie and Freddie and the FED are all supported and subsidized by taxpayers - irregardless of how anyone wants to spin it. Not to mention the pass-thru risk to MBS holders who don't know what they've taken on. With questionable underwriting guidelines -- FHA has filled the void of many Alt-A lenders at low rates to keep the housing market afloat. One big Ponzi scheme IMHO.
I don't have stats of the 80's savings and loan crisis - but am sure taxpayers took a hit there also. It's all a game the govt. plays to keep tax dollars flowing.
Historically speaking, most FHA - insured mortgages were the original Sub Prime loans. FHA Guidelines are public information.
FHA is now 83 years old.
The FHA Reserve Fund has been available to partially pay claims for losses incurred by lenders when borrowers fail to honor their obligations to repay their loans. The Reserve Fund is funded by one time and monthly mortgage insurance premiums paid by borrowers. For the first time in it's history, the FHA required a bailout to honor claims for losses in 2013. This implies that historical FHA premiums were inadequate to handle the consequences of the housing bubble.
I have no issue with Trump's action to reverse Obama's 11 th hour EO to reduce the monthly FHA insurance premium on new mortgages to give his Admin time to evaluate the adequacy of the FHA Reserve Fund to meet its obligations.
Furthermore, the government should not be assuming all the risk for people who sign up for loans they can't afford. Let the banksters take on some of it.
Ding ding ding.
I got an FHA loan at 52 when I bought my condo. I was not in a financial position to buy in the area where I was raising my daughter, where I lived because I had family there, good schools, and public transportation to my job in the city. I didn't move to a less-expensive area and buy until she graduated from high school.
My mortgage is not going up. That's ridiculous. I have a contract with a bank at a fixed interest rate.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
