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.