Although it’s of course newsworthy – if not at all surprising – that the Trump Administration plans to retain current FHA premium levels, not adopt the Obama reduction, the annual report to Congress is more illuminating than the actuarial report on the future of FHA. With non-bank origination now accounting for a startling 86% of FHA originations and FHA acknowledging the credit-availability challenges we highlighted, we expect significant near-term change in premium and indemnification-risk aspects of FHA designed to lure back the big banks. We note also the report’s discussion of recent refi volume – an early warning that HUD will shift refi policies before the predatory-lending accusations now sweeping over VA also taint FHA.
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