Researchers Argue for Lower FHA Premiums

By Jann Swanson

Posted To: MND NewsWire

In mid-November the Federal Housing Administration (FHA) announced that its Mutual Mortgage Insurance Fund (MMI) had returned to solvency . The fund, damaged by the collapse in housing prices and skyrocketing delinquencies caused by a number of factors, had fallen below the Congressional mandated requirement that it maintain capital reserves representing 2 percent of its outstanding mortgage guarantees. In a previous article , we noted “The Department of Housing and Urban Development (HUD) said on Monday that the Fund has gained nearly $6 billion in value over the last year and now stands at $4.8 billion with a capital ratio of .41 percent. One year ago that ratio was a negative .11 percent.” The funds recovery meant that, while it was still a ways from its required position, it no longer needed…(read more)

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