On Friday, his first day in office, Donald Trump's administration reversed a decision that would have cut the FHA mortgage insurance premium, which would have saved the average home owner about $500/year. It was set to go in effect on Jan. 27 and has been suspended indefinitely.
Are you happy about this?
What is the cost of that premium? Not to the homeowner, but the people that actually pay it? Because if it John Q Public is paying to insure a FHA mortgage then it most definitely should not be cut to the homeowner.
As an alternative, would you consider raising the requirements to obtain an FHA mortgage, in order that the mortgage insurance not cost so much?
I bought my first condo using an FHA loan. The type of savings is very valuable to the first-time home owner. Further, usually such incentives benefit the housing industry as it encourages home ownership. There may, in fact, be no cost whatsover to John Q. Public. It may simply mean less profit for the federal government. Hard to say.
You're kind of off base here, most homeowners in the US do not have an FHA-insured mortgage. First, not everyone who owns a home even has a mortgage, many people own their homes outright because they've paid off their loans or they are simply rich. Second, even when people qualify for an FHA-insured loan they don't take it because of all the strings attached. Obama cut the rate two years because participation in the program was dwindling due to competition from Fannie Mae, Freddie Mac, and other options for home buyers of moderate means. Trump raising the rate again is basically just putting things back to where they were during most of Obama's term.
Now, I would like to see a US where the vast majority of the middle class are homeowners rather than renters, and raising the FHA insurance premium is obviously not moving toward that goal. But there are a lot of other problems with the FHA-insured loan program that have nothing to do with Trump.
I posted a similar thread (deleted to avoid duplication). Now let the rationalizations of how this is going to help ordinary working people begin . . .
Do you refer to the ordinary working people that will foot the bill, or the ordinary working people with the mortgage that they want to pay less than agreed for?
You're about to whine about the general principle of people in society having having to help other people in society. Not going there with you.
The cost of living in civilized society (and all the benefits that brings) is having to contribute to the whole. Don't like it? Then go live in a society where they don't have any income tax. There are plenty to choose from: United Arab Emirates, Oman, Bahrain, Qatar, Saudi Arabia, Kuwait, Bermuda, Cayman Islands, The Bahamas, Brunei etc.
Enjoy your life there!
Don't like being being unable to take whatever is wished in taxes so politicians can use them to buy votes and lock people to government charity? Go live somewhere else - it is not something Americans support. Don't like when others recognize "the whole" to mean the elite in power? Go live somewhere else - Americans are too canny to be fooled so easily. Try North Korea, perhaps, or China. Even Russia.
You know, it's kind of interesting that I've never seen a single liberal EVER try to end an entitlement, government charity program. Never. Ever think about just why that is? Hint: think about what happens when those politicians lose their slaves.
A 0.25% reduction in FHA loans does not constitute wanting to "take whatever is wished in taxes". It constitutes helping people who are already trying to help themselves. When their circumstances improve, their taxes then help others in the same situation they were in.
You have benefitted, directly and indirectly, from the taxes other people pay, just as other people benefit from the taxes you have paid. Want to make government more efficient, less wasteful? No argument from me. Want to make government more innovative and flexible? Great. Want to enable as many people as possible support themselves without assistance? Fine. But acting as if you have been told to give up your house to a stranger, because of a 0.25% cut in FHA loans. That's ridiculous.
And if you think Trump and his cronies are not the "power elite", you have already been fooled. The political elite has been replaced by the corporate elite. That is all.
"The political elite has been replaced by the corporate elite. " Very astute.
"A 0.25% reduction in FHA loans does not constitute wanting to "take whatever is wished in taxes"."
Never is, is it? Each tiny step, whether $500 per year in reduced fees or $5,000 per year in income tax "rebates" for payments never made. Except that those tiny steps never go away and next year there will be more of them. But I'm sure you understood that, and the statement is just more spin.
"Want to enable as many people as possible support themselves without assistance?"
Unfortunately, all too many cannot be "enabled", but must be "forced". And those that DO want help with self support not only don't get it but instead get further chains binding them.
"But acting as if you have been told to give up your house to a stranger, because of a 0.25% cut in FHA loans."
If you are already paying that $500 per year then there is no reason to give up anything. If you aren't, then you don't have a home and again won't give up anything. Somehow, asking that you continue to satisfy the terms of a contract you have already signed has become "giving up your home to a stranger". What a tremendous piece of spin! Not something that isn't immediately recognized for the garbage it is, but still a nice effort.
That is correct - political elite has been replaced with corporate elite. Eventually it will return to political...but they will hopefully recognized that using the elite status for personal gain rather than doing their job will result in losing it again. Not that I see the connection between corporate elite vs political elite and excessive entitlement programs. Unless you think corporations are going to start using their profits to chain the poor to them?
"Earlier this month, the Obama administration moved to lower mortgage fees beginning Jan. 27, a week after Donald Trump's inauguration. Mortgage lenders, builders and real estate agents endorsed the move, saying it would help first-time and lower-income borrowers."
"The National Association of Realtors said the Trump administration's reversal could keep as many as 40,000 would-be homebuyers out of the market this year."
When one takes a FHA loan an insurance premium is tacked on automatically. Anyone that has presently an FHA loan is paying this very low premium. This premium will go down as one increases equity in their home. This premium is payed into a pool, it protects the lenders when a person defaults on a loan. So, the media is skewing the this entire "problem". Now ,please consider, if as Obama had hoped to stop ones premium payment, this is what would occur. First the premium fund would be depleted, the banks would most defiantly raise the rate of borrowing on the FHA loan. This is how the banks would cover the money they would lose from people that defaulted. The government would also be responsible for bailing out this program. The tax payers should not have to bail out a failed Goverment program due to cancelling this type of insurance premium. If banks raise their rates for FHA loans, all lenders will raise their rates... In my Opinion people should do research on this given subject before commenting. This news story was clearly meant to once again smear President Trump. In all reality we as tax payers, and borrowers should thank him. Let m once again repeat anyone with a FHA loan already pays this premium... If you default you are covered. I don't want to pay in the end for anyone that does not have default insurance. Sorry about that...
There is always two sides to every story... "House Republicans objected to the reduction because it would have lowered the amount of funds FHA has available to cover mortgage defaults. House Financial Services Chairman Jeb Hensarling (R-Tex.) issued a statement earlier in the week saying, “the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk for footing the bill for another bailout.” The Washington Post
So the other side is that the home owners lose the money to the soft pillowy safetynet for the banks, so banks can keep extending and trading mortgages that are high risk without worrying about going broke. Instead of, ya know, not approving mortgages that over extend borrowers.
Well that's all right then.
That's exactly what FHA loans are about - a government approved and financed method of making mortgages that over extend borrowers. That is the whole purpose of the entire program.
Banks are nothing but paper shufflers, then, that get paid a little to do that paperwork.
I became a middle-aged first time owner of a tiny condo last year, and that $500 was not insignificant to me. I was calculating down to the last $1 during settlement week. Ate a lot of peanut butter sandwiches that month. But it is nice to be investing that hefty monthly payment in an asset now rather than putting it straight in someone else's pocket.
" I was calculating down to the last $1 during settlement week."
Damn refreshing to hear a real-world perspective, instead of just partisan rhetoric.
Congrats on your achievement.
We tried, and tried hard, for a FHA loan. Unfortunately, it was for a home to be built, and it took a year to get approval. By which time (with double digit inflation) the price had gone up and it had to be started all over again.
So we ended up buying an existing home with a conventional loan, and paying the PMI that went with it. Still an exciting day as we moved into our first ever house and like you say, things were pretty tight for a while.
Welcome to the club - it's not always comfortable, but our homes are ours.
Donald was precisely one of the real estate moguls who CAUSED the GFC .
My guess is that Trump is stopping every last minute Obama policy change as quickly as possible. It's what I would do if I were in his place. Stop all last minute changes before they take effect. See if they match my plans. If not, scuttle them.
You are reading far too much into this. It doesn't mean Trump is anti home owner or pro big government. It means he's taking charge now. Obama is gone.
by ewigfall6 years ago
can I get a reduction in my mortgage insurance permiumsI Have a fannie mae mortgage and pay $511/mo in insurance. I need a reduction
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