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This Week in Washington

Biden-Harris administration works to make homes more affordable

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This Week in Washington
Monday, February 27, 2023

The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), reduced the annual mortgage insurance premiums charged to homebuyers for mortgage insurance, a monthly fee homeowners with FHA-insured mortgages pay to insure their mortgages on top of their monthly principal and interest payments.

The reduction in the annual mortgage insurance premium will be 0.3 percentage points, from 0.85 percent to 0.55 percent, the White House stated in its brief. This will save around $800 for homeowners and is part of the Biden-Harris administration’s efforts to address the affordable housing crisis.

“FHA’s announcement strikes an appropriate balance between assisting homeowners and ensuring the capital reserve ratio and insurance fund remain strong,” National Association of Realtors (NAR) President Kenny Parcell said. “NAR has continuously advocated for responsibly reducing mortgage insurance premiums to help qualified homebuyers struggling with affordability in the current environment, and we applaud the administration for this action.

“Mortgage rates have doubled over the past year, and home prices have increased more than 30 percent in some counties,” he continued. “In this competitive market, new and low- to moderate-income buyers are often left behind. This reduction will help alleviate some of the financial stress those potential buyers encounter when purchasing a home and allow more people across the country to achieve the American Dream of homeownership.”

Mortgage Bankers Association President and CEO Bob Broeksmit also gave kudos to HUD Secretary Marcia Fudge and FHA Commissioner Julia Gordon for the adjustment.

“The lower premiums will expand homeownership opportunities by lowering mortgage payments for qualified FHA borrowers, providing critical relief from the steep rise in mortgage rates and home prices just in time for the spring buying season,” Broeksmit said. “This will especially help minority homebuyers and low-and moderate-income households who are predominantly served by FHA loans.

“The Mutual Mortgage Insurance Fund is strong, with low delinquencies and a capital reserve ratio several times above the statutory minimum,” he added. “Ensuring a robust FHA program that protects taxpayers and offers affordable homeownership opportunities for families in underserved communities is important, and we will work with the Biden administration and Congress on policies that have the greatest impact on borrower affordability and sustainability.”

Sen. Sherrod Brown (D-Ohio), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, also commented on the adjustment.

“Homeownership is out of reach for too many Ohioans and families across the country,” Brown said. “By cutting the monthly cost of a mortgage for many first-time and lower-income buyers, the administration is making the dream of sustainable homeownership available for more working families.”

 

Today's other top stories
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12 USC Section 2605 or Section 6 is titled Servicing of mortgage loans and administration of escrow accounts. It pertains to qualified written requests, notices of transfer of servicing and the administration of escrow accounts.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.
12 USC Section 2609 or Section 10 is titled Limitation on requirement of advance deposits in escrow accounts. It governs escrow accounts including notifications and statements to borrowers. Section 10 also sets out penalties for those who violate the section.
RESPA Section 3 provides that a thing of value includes any payment, advance, funds, loan, service or other consideration

Regulation X says thing of value includes: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses or reduction in credit against an existing obligation.
A form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form represents the closing transaction and provides each party with a complete list of incoming and outgoing funds. RESPA requires the HUD-1 to be used as the standard real estate settlement form in all transactions in the U.S. involving federally related mortgage loans.
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