FHA Exhausts Their Capital Reserve - John Shellington

FHA Exhausts Their Capital Reserve

 

FHA has projected losses from their mortgage insurance program that could exceed their cash reserves. In order to avoid a bailout from Congress, look for FHA to increase mortgage insurance premiums next year. In addition, current rules allowing the monthly FHA mortgage insurance premium to be dropped once a borrower reaches a 78% LTV could be changed to collection of the premium for the life of the loan.

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