The FHA is asking for authority to collect an administrative fee from borrowers to help they say, “further develop its quality assurance efforts.” This on top of reports they will have a $7.8 billion capital reserve balance at the end of Fiscal 2014 and will not require another bailout from the U.S. Treasury.
The report triggered an immediate call for FHA to reduce the Insurance Premiums it currently charges home buyers. Keep in mind, FHA increased their Annual Mortgage Insurance Premium (MIP) and their Upfront Mortgage Insurance Premium (UFMIP) in 2013 to bolster their Mortgage Insurance Fund that was depleted in the aftermath of the housing crisis. They later required the MIP to be paid for the life of the loan. These increases were on top of increases imposed back in 2011.
Something doesn’t make sense! Here we have a federal agency whose main objective is to “assist in providing housing opportunities for low and moderate-income families.” Yet if one reads between the lines, management is still having quality control issues and is too embarrassed to ask Congress for more money to correct them. Instead let’s force new home buyers pay for the sins of the past by increasing their closing costs again…making it more expensive to own a new home!
And they say the housing market is on the way back? Not with this kind of mentality!