FHA Suspends Previously Announced MIP Cut

Multiple outlets reported that the Federal Housing Administration’s (FHA) previously announced Mortgage Insurance Premiums (MIP) cut was among the regulatory actions suspended by President Trump. While the suspension is “indefinite”, Secretary Nominee of the Department of Housing and Urban Development (HUD) Ben Carson stated in his confirmation hearing that he would review the FHA’s previous decision to lower the MIP from 0.85 percent to 0.60 percent. There is no announced timeframe for when HUD will complete its review.

As previously noted, SFIG strongly believes that reinvigorating the private label MBS market should remain an important priority for the housing finance industry. SFIG believes that fees resulting from government policy decisions should fully reflect the cost of the credit risk to help protect against unintentional crowding out of private capital. SFIG will continue to work with policymakers and regulators to advocate for the expansion of the PLS market in order to ensure that private capital bears the majority of mortgage credit risk over time.

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