Trade groups urge White House to lower FHA premiums, ease loan fees

by Sarah Wolak

Multiple mortgage lending trade groups are urging the White House to take administrative steps to lower the costs of home loans, arguing that federal regulations have driven up borrowing expenses as affordability worsens.

In a letter sent Wednesday to White House National Economic Council Director Kevin Hassett, the Mortgage Bankers Association, America’s Credit Unions and the Independent Community Bankers of America called for targeted changes that would not require congressional approval.

The groups called for an end to the tri-merge credit reporting requirement and to allow a single-file framework to reduce costs and streamline originations. The groups seek to end the requirement that lenders obtain credit reports from all three major bureaus, which would allow for a single credit report for loans backed by Fannie Mae and Freddie Mac.

“A single-file framework promotes beneficial competition in the credit reporting space … and reduces borrower and lender costs that have seen dramatic increases in recent years,” the groups wrote.

They also urged the U.S. Department of Housing and Urban Development (HUD) to cut mortgage insurance premiums charged by the Federal Housing Administration (FHA), citing the agency’s nearly 11.5% insurance fund reserve that is well above the 2% statutory minimum.

“FHA’s just-released actuarial report on the Mutual Mortgage Insurance Fund shows a reserve ratio of nearly 11.5%, which is almost 6 times the statutory minimum. The administration should consider lowering the annual MIP (and/or eliminating the life-of-loan premium requirement) to provide immediate financial relief to borrowers and expand access to homeownership,” the letter stated.

Lastly, the groups called on the Federal Housing Finance Agency (FHFA) to reduce loan-level price adjustments (LLPAs) on conventional mortgages and eliminate the fees for certain refinances, warning that failing to do so could shift borrowers toward FHA loans.

The groups said regulatory complexity has increased mortgage costs and urged broader modernization to improve housing affordability.