Industry NewsMortgage

Premium hike dents FHA applications

HUD plans to shift increase to annual premiums

Applications for FHA-guaranteed loans fell nearly 20 percent last week after the government hiked upfront premiums for the mortgage insurance program, the Mortgage Bankers Association said in releasing the results of its Weekly Mortgage Applications Survey. Applications for conventional mortgages were also down, with demand for refinancings falling for the fifth week in a row as mortgage rates reversed recent increases but remained elevated above their previous lows. With claims mounting on the Federal Housing Administration's mortgage insurance program, the Department of Housing and Urban Development (HUD) in January announced several steps to cut costs and raise revenue. HUD raised upfront premiums paid by FHA borrowers -- previously set at 1.75 percent -- to 2.25 percent for loans assigned case numbers on or after April 5. Some demand for FHA loans may have been pushed forward, as loan originators were advising clients who were planning to purchase a home ...