(RECAP: Secretary of HUD nominee Ben Carson said at his confirmation hearing, “Certainly, if confirmed, I am going to work with the FHA administrator and other financial experts to really examine that policy.” He was talking about an earlier announcement from the current HUD head that FHA insurance rates were going to be cut. On January 12, when Carson made that remark, most everyone viewed it as a throw-away line. Now not so much. As background, on January 9, current HUD Secretary Castro announced a 25-basis point cut in the annual premium charged for FHA insurance. The reduction, scheduled to go into effect on January 27, would return FHA annual premiums almost back to where they were before a crisis in the FHA insurance fund caused substantial hikes in both the annual and the upfront premiums. A press release today from the Mortgage Bankers Association says, “Based on recent testimony and political pushback, we believe there is a strong chance the most recent MIP reduction… may be one of the rollback actions taken soon after President Trump takes office.” MBA says it expects this change will be effective immediately and “could create significant operational challenges for lenders and their customers.” The association urged its members to prepare to unwind any changes they have already made to adjust for the new rates if the delay, in fact, occurs.)
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