With few exceptions, FHA borrowers are stuck paying mortgage insurance for the life of the loan, even after building significant equity. This insurance is meant to protect against the risk of foreclosure on low-equity loans, yet even clients with 50% equity still pay for insurance when there is no realistic risk of foreclosure, and no actual financial loss by the lender. This unnecessarily costs your customers hundreds of dollars a month, and it’s time we push for change that reflects today’s reality.
This has never made sense to mortgage brokers. And it doesn't make sense to Congressman Gregory Meeks (D-NY) and Congressman Pete Sessions (R-TX) either!
Rep. Meeks (D-NY) and Rep. Sessions (R-TX) introduced legislation that would allow homeowners to stop paying FHA MI on existing mortgages with <78% LTV, just like conventional loans. FHA currently has a $173,000,000,000 capital fund, which is 473% higher than its mandate. It's time to give some of this money back to American homeowners, and this is a great place to start!