Industry NewsMortgage

FHA premium changes pushed to Oct. 4

Lenders granted more time to revamp systems
Published on Aug 12, 2010

The Federal Housing Administration is pushing back the implementation date for new premium structures on FHA mortgage insurance to Oct. 4, after lenders complained that they need more than five weeks to update loan disclosures and computer systems.FHA Commissioner David Stevens announced last week that upfront premiums for FHA mortgage insurance would be rolled back from 2.25 percent to 1 percent on Sept. 7, while annual premiums would nearly double.FHA had raised upfront premiums from 1.75 percent to 2.25 percent in April, to cope with rising losses on FHA-guaranteed loans. The Obama administration promised to reduce upfront premiums if Congress gave it the authority to raise annual premiums beyond their statutory limit of 0.55 percent.Legislation raising the statutory limit on annual premiums to 1.55 percent was approved by lawmakers on Aug. 4 and has been presented to President Obama for his signature.The day after the Senate's unanimous passage of HR 5981, Stevens said FHA would ro...

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