WASHINGTON (1/9/15)--President Barack Obama's announcement that the Federal Housing Administration (FHA) will lower annual mortgage insurance premiums was met with praise by the Credit Union National Association. The action reduces premiums to 0.85% from 1.35%, according to the White House.
CUNA President/CEO Jim Nussle welcomed the announcement, but advocated for all agencies to take additional steps to assist credit unions and their members.
"While today's announcement is a step in the right direction, there are additional steps that need to be taken to help credit unions and their members even further," Nussle said. "We look forward to working with Congress and the administration to closely examine the regulatory burden facing lenders and to remove barriers to mortgage lending that keep qualified borrowers from achieving the dream of homeownership."
Nussle added that, since credit unions were not the cause of the financial crisis, and in fact served their members admirably over that time, additional regulatory relief should be forthcoming.
"The financial crisis, caused by the nation's biggest bank,s destroyed the finances of many hard-working families, but credit unions stood by their members and helped assist them with their mortgages to every extent possible. In fact, in 2009, credit unions saw their delinquency for mortgage loans peak at 1.61% compared to 8.86% at the banks--many who lured consumers into debt they could not afford," he said.
"CUNA sent a letter Tuesday, along with a number of other housing and financial trade organizations, requesting lower premiums because credit unions have long advocated prudent moves by government agencies involved in home finance to reduce the regulatory burdens that make home ownership more expensive."
The FHA, in a release posted shortly after the conclusion of Obama's speech Thursday, announced the lower premium prices will take effect by the end of this month. A mortgagee letter will be published by the agency shortly, which will detail the new pricing structure.
The reductions are projected to save more than two million FHA homeowners an average of $900 per year, as well as allow 250,000 new homebuyers to purchase a first home over the next three years.