California realtors to federal government: Please drop government-backed mortgage premiums

Industry group says such a change could save borrowers hundreds of dollars a month

TRD LOS ANGELES /
Apr.April 03, 2020 01:00 PM
CAR’s 2020 president, Jeane Radsick
CAR’s 2020 president, Jeane Radsick

The California Association of Realtors has asked the federal government to ease off homeowners with mortgages taken out through the Federal Housing Administration.

The industry trade group asked to cancel FHA insurance premiums on mortgages with loan-to-value ratios below 80 percent and for lenders who haven’t missed payments in three years. The organization represents about 200,000 real estate professionals, according to its letter sent to the Department of Housing and Urban Development dated earlier this week.

CAR contends such a move would “save borrowers hundreds of dollars a month and ease the economic burden of families” facing financial uncertainties related to the coronavirus pandemic. FHA charges a roughly 2.55 percent annual premium on most loans with loan-to-value ratios of 90 percent or below.

Around 8.1 million households have mortgages insured by the FHA, according to Politico. Government-mandated business closures have put many homeowners and renters in precarious financial situations. More than 10 million people declared for unemployment across the U.S. in the last two weeks. In New York State alone, unemployment claims shot up 1,379 percent year-over-year last month.

The federal government has taken several measures to ease the financial burden on borrowers, including those with FHA-backed mortgages. Two weeks ago, the Trump Administration ordered the Department of Housing and Urban Development to suspend foreclosures and evictions through April.

The Federal Housing Finance Agency ordered mortgage giants Fannie Mae and Freddie Mac to suspend single-family home foreclosures and evictions for at least 60 days. The FHFA also ordered both mortgage lenders give multifamily landlords a break on their loan payments if they do not evict any tenants in the near term, though much confusion remains over what happens in 60 days.


Related Articles

arrow_forward_ios
John Atwater, CEO of Prime Group, and Park La Brea (Credit: Brown University, and Park La Brea)

At Prime Group’s 4,200-unit Park La Brea, social distancing is a big problem

At Prime Group’s 4,200-unit Park La Brea, social distancing is a big problem
Rick Caruso, the Grove mall (Credit: Donato Sardella/Getty Images, and CARUSO)

If you clean it, will they come? Rick Caruso’s visible plan to reopen malls & resorts

If you clean it, will they come? Rick Caruso’s visible plan to reopen malls & resorts
An illustration of Gavin Newsom (Credit: Michael Kovac/WireImage via Getty Images, and iStock)

California OK’s retail re-openings, but leaves key decisions to local officials

California OK’s retail re-openings, but leaves key decisions to local officials
Griffith Park (Credit: iStock)

Developer’s folly means more space at Griffith Park

Developer’s folly means more space at Griffith Park
3M CEO Mike Roman and Altaris Capital Partners Principal Garikai Nyaruwata

N95 mask-maker 3M sells Northridge manufacturing plant

N95 mask-maker 3M sells Northridge manufacturing plant
Fewer homes are selling across Southern California, but low supply helped push pricing up across the region.

Far fewer SoCal homes traded in April, but prices rose

Far fewer SoCal homes traded in April, but prices rose
First District Supervisor Hilda Solis (Credit: Rebecca Sapp/Getty Images)

LA County select reopening target date for restaurants and retailers

LA County select reopening target date for restaurants and retailers
Josh Flagg and Bobby Boyd (Credit: Gregg DeGuire/Getty Images)

Josh Flagg and Bobby Boyd donating July commissions to charity

Josh Flagg and Bobby Boyd donating July commissions to charity
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...