Yesterday’s decision by the Department of Housing and Urban Development to lower the Federal Housing Administration (FHA) mortgage insurance premium was greeted with a sharp rebuke by Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, who warned that this action will create more harm than good.
“It seems the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk of footing the bill for yet another bailout,” said Hensarling in a statement. “Just three years ago, the taxpayers had to spend $1.7 billion to bail out the FHA. Lowering premiums to below market rates now only puts the FHA in a more precarious financial condition.”
Hensarling also questioned the decision to lower the FHA premium with less than two weeks remaining in the Obama Administration.
“Playing politics with the FHA through cynical, surprise 11th hour rule changes is irresponsible and endangers the integrity and success of the FHA,” he continued. “To be successful, the FHA must be fiscally sound, with a clearly defined mission, to ensure homeownership opportunities for creditworthy first-time homebuyers and low-income families. Lowering FHA premiums now is counterproductive to achieving these goals and puts the U.S. taxpayer at greater risk.”
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