The MMI Fund is flush with cash

Despite an incredible year for its Mutual Mortgage Insurance Fund, HUD doesn't appear to be in any rush to cut mortgage insurance premiums.

Good afternoon! Was this newsletter forwarded to you? Sign up here. Hello, LOs! Despite an incredible year for its Mutual Mortgage Insurance Fund, HUD doesn't appear to be in any rush to cut mortgage insurance premiums.    The fund's capital ratio reached 8.03% at the end of September, up from 6.10% a year ago. The agency said today that they still had a long list of concerns – the dollar volume of significantly delinquent mortgages is now $110 billion; higher-than-expected unemployment could still threaten the health of the MMI fund; fast-rising mortgage rates could make home retention and loss-mitigation tools more expensive and reduce refi possibilities; and a surge of borrowers exiting forbearance and capacity constraints in the industry could complicate matters.    All of that means HUD likely isn't going to cut mortgage insurance premiums this year, even though they haven't moved in seven years. Not that industry stakeholders won't ask Marcia Fudge to do so with all deliberate speed.    "HUD should focus on pricing changes that have the greatest impact on affordability and sustainability for borrowers, such as reductions to the annual premiums, while being mindful of the current delinquency levels in the FHA portfolio and the elevated number of borrowers who remain in forbearance," Bob Broeksmit, CEO of the Mortgage Bankers Association, said in a statement.    Lots of borrowers already don't bother with FHA loans because of the MIP rates – they'd rather wait until their credit scores improve and they can get a conventional loan, LOs told HousingWire. Given how flush the MMI fund is, cutting the mortgage insurance premium by even 50 bps likely wouldn't put HUD in financial jeopardy.

LOs – what do you think? Share your thoughts with me at jkleimann@housingwire.com.

 

James Kleimann

Managing Editor, HousingWire

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