Could FHA afford to loosen up on premiums? Yes. Will it? Don’t hold your breath

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It’s been a key question for lenders and real estate professionals who work with first-time and moderate-income homebuyers: When will FHA finally loosen up and give us a break on mortgage insurance premiums? Now that the agency is back making money and adding to its insurance fund reserves -- check out the Obama administration’s latest budget proposal -- isn’t it time to start chipping away at FHA’s record-high, deal-killing insurance premiums? Isn’t it time to stop sending creditworthy buyers to cheaper conventional financing competitors -- primarily Fannie Mae and Freddie Mac -- because private mortgage insurers’ premiums are more affordable? Well, don’t hold your breath. The answer from FHA is no. Although the administration’s new budget proposal forecasts $10.2 billion in revenues for FHA in 2014 and a profit margin of 9 percent on loans endorsed in 2015 -- up from 7.25 percent this year -- officials confirmed to me last week that there’ll be no significa...