FHA Lowers Mortgage Insurance Premiums (MIPs) By 31.25%

HUD Secretary (for the moment) Julian Castro just lowered the Mortgage Insurance Premiums (MIPs) across the board by 31.25%. The purpose? To lower lending costs, partially offseting the increase in mortgage rates.

fhamip

The FHFA Home Prince is now officially above the peak of the home price index prior to The Great Recession. And serious delinquencies on FHA-insured loans is less than half of was at the peak (good news), but remains over twice as high as Freddie Mac’s (and Fannie Mae’s) serious delinquency rates).

fhafreddelinq

It is strange to me that the FHA is still insuring 30 year fixed-rate mortgages for loans in excess of $625,000. Ordinarily, that should be the domain of private mortgage insurers (PMI). While FHA share has diminshed during the housing bubble, it expanded greatly during and after the financial crisis. While it has been generally shrinking since 2010, FHA share remains higher today than during 2002.

sales-by-financing-apr-1024x768

Here is current HUD Secretary Julian Castro saying “It was fun while it lasted!”

120910_julian_castro_ap_328-1

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s