Federal Housing Administration to hike mortgage insurance premiums
WASHINGTON — The Federal Housing Administration said on Friday that it will once again raise its mortgage insurance premiums and take a series of other steps in hopes of putting the agency on firmer financial footing and avoiding the need to seek taxpayer aid for the first time in its 78-year history.
The move means new borrowers of FHA-backed loans will pay an average of $13 more per month in premiums. While the increase should help bolster the agency's bottom line, every bump in prices also makes mortgages more expensive for the very borrowers that the FHA is tasked with helping.
“It's a tightrope,” FHA Commissioner Carol Galante said on Friday of carrying out her agency's mission while also ensuring that it stays solvent. “We continue to look at that balance every day.”
The changes occurred as an independent audit of the FHA released on Friday showed that mounting losses from mortgage delinquencies — particularly on loans the FHA backed between 2007 and 2009 — left the agency's reserves with a projected $16.3 billion deficit as of Sept. 30.
Friday's results underscored the debate about the proper role of the government in backstopping the nation's housing market and how much risk taxpayers should face in order to ensure that mortgage markets continue functioning through good times and bad. Roughly nine out of 10 new mortgages are backed by the federal government.
Critics such as Sen. Bob Corker, R-Tenn., say the FHA has “strayed a long way from its original mission” and that the government should not be in the business of backing loans “to people who can't pay them back.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Alaska-bound, Obama makes waves by renaming Mount McKinley
- Postal Service falls short of slower mail delivery standards
- New Orleans slow to heal 10 years after Hurricane Katrina
- Pope Francis’ lack of familiarity with United States unusual
- CDC lauds schools for better nutrition
- University of Texas removes statue of Confederate President Davis
- Memorial service for slain Virginia journalists brings call for action
- Obama inches closer to veto-proof support for Iran nuclear deal
- Motive in ambush of Houston area deputy remains unknown
- Common Core test results released
- Supreme Court can resolve Kentucky county clerk’s refusal to issue marriage licenses to gays