LOS ANGELES--(BUSINESS WIRE)--The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) commends California Sen. Barbara Boxer (D-CA) and 17 other U.S. senators, including California Sen. Dianne Feinstein (D-CA), for writing to Housing and Urban Development (HUD) Secretary Julián Castro asking him to re-examine FHA premium levels to determine whether they can be reasonably and safely lowered.
“We applaud Senator Boxer (D-CA) and the 17 U.S. senators who asked HUD to reduce fees on FHA loans in light of the agency’s improved financial situation,” said C.A.R. President Chris Kutzkey. “These senators understand that lowering FHA fees will serve the agency’s mission to provide a path to homeownership for the many creditworthy families but not hurt its solvency.”
The letter stated, “With the improved outlook of the Mutual Mortgage Insurance Fund (MMIF), we believe now is an appropriate time for the FHA to re-examine its premium levels to determine whether they can be reasonably and safely lowered,” the senators wrote. “While preserving the solid footing of the reserve fund is essential, reducing fees does not necessarily conflict with this goal. As any business knows, just as a price that is set too high will lead to less profit, not more, lowering the premium on qualified borrowers may actually produce greater revenue and fully restore the capital ratio more quickly.”
The NATIONAL ASSOCIATION OF REALTORS® (NAR) estimates that in 2013, nearly 400,000 creditworthy borrowers were priced out of the housing market because of high FHA insurance premiums. By lowering its fees, the FHA could provide greater access to homeownership for historically underserved groups. Over the past four years, the share of first-time home buyers using FHA-backed loans shrank from 56 percent to 39 percent.
C.A.R. and NAR are strong supporters of the FHA and believe a shift in policy would also increase the volume of borrowers acquiring FHA-backed loans and contribute to the solvency of the MMI Fund and make the dream of homeownership a reality for millions more Americans.
The letter was also signed by Sens. Dianne Feinstein (D-CA), Robert Menendez (D-NJ), Charles E. Schumer (D-NY), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Barbara Mikulski (D-MD), Patty Murray (D-WA), Richard Durbin (D-IL), Ben Cardin (D-MD), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), Chris Murphy (D-CT), Mazie Hirono (D-HI), Edward Markey (D-MA), and Cory Booker (D-NJ).
Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 165,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.