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CAR Requests HUD And FHA Reduce Mortgage Insurance Premiums

Navi Persaud
Apr 01, 2021
California Association of Realtors logo.

The California Association of Realtors issued a statement in response to the Department of Housing and Urban Development's announcement on the state of the Federal Housing Administration Mutual Mortgage Fund.

"C.A.R. continues to support the steps that HUD and the FHA have taken during the COVID-19 crisis to help housing and struggling homeowners during the pandemic," said C.A.R. president Dave Walsh, vice president and manager of the Compass San Jose office. "Recognizing that the FHA plays a pivotal role in providing housing opportunities for families throughout California, C.A.R., for years, has asked the FHA to lower the mortgage insurance premium. Doing so will provide greater homeownership opportunities and ensure that homebuyers using FHA loans are not overpaying for their mortgages."

"As the nation moves beyond this crisis, C.A.R. will continue to ask HUD and the FHA to reduce the mortgage insurance premium so that the recovery is equitable for all who want to attain homeownership while interest rates continue to hover at historic lows."

On March 30, HUD secretary Marcia L. Fudge issued a statement on the quarterly report to Congress on the FHA's single-family Mutual Mortgage Insurance Fund programs.

"HUD has an obligation to provide a quarterly report to Congress on the FHA insurance program and provide detailed information on the composition, credit quality, and financial position of the program. I am taking this opportunity to discuss the state of the FHA insurance program and the health of the Mutual Mortgage Insurance Fund a year after the COVID-19 health and economic fallout," said Fudge in her statement.

"The health of FHA’s Mutual Mortgage Insurance Fund has remained resilient despite the financial challenges faced by homeowners with FHA-insured mortgages in 2020. The fund stands at more than $80 billion and remains well above the 2% minimum capital reserve required. Through the pandemic, the FHA portfolio has experienced increased levels of seriously delinquent loans and a heightened level of loans in forbearance. We continue to monitor mortgage performance trends within our portfolio, particularly related to those homeowners who are struggling financially because of the pandemic."

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