WASHINGTON (dpa-AFX) - The Trump administration has indefinitely suspended a recent reduction of Federal Housing Administration (FHA) annual mortgage insurance premiums which was passed by the Obama administration.
The agency said that the plan to reduce the annual premiums by 25 basis points for new mortgages would not go into effect and has been suspended indefinitely.
FHA said it will issue a subsequent Mortgagee Letter at a later date should this policy change.
The drop in the premium rates were to go into effect on or after January 27. The new premium rates were expected to help FHA-insured homeowners to save an additional $500 per year.
'After four straight years of growth and with sufficient reserves on hand to meet future claims, it's time for FHA to pass along some modest savings to working families,' said former Housing and Urban Development Secretary Julián Castro after the decision was announced on January 9 to lower premium rates amidst rising mortgage rates.
The Federal Housing Administration, generally known as 'FHA', provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934. In 2013, FHA received $1.7 billion as a bailout amount after its reserves fell short.
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