Following President Obama’s announcement that the Federal Housing Administration (FHA) will reduce annual mortgage insurance premiums, Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, praised the action as critical for the nation’s homebuyers.
In October, 2014, Waters and Rep. Michael Capuano (D-MA), Ranking Member of the Subcommittee on Housing and Insurance, called on Secretary Julian Castro to provide relief from FHA’s mortgage insurance premiums, citing concerns they could undermine affordable homeownership for many low-to-moderate income families.
Waters issued the following statement commending the action:
“I commend President Obama and Secretary Castro for taking action to provide much-needed mortgage relief to millions of families looking to purchase a home, while also enabling homeowners to save millions of dollars in mortgage payments over the years to come.
The Great Recession decimated our economy and left our housing market on life support. During the worst of the crisis, when the private sector virtually left the market, the Federal Housing Administration stepped up and provided the liquidity that kept our struggling housing market afloat. Since then, our economy has moved toward recovery, but the housing sector continues to suffer from a tight lending environment.
Recognizing FHA’s vital role in stabilizing and strengthening our national mortgage market, I have urged Secretary Castro to reconsider its premium fees, noting that way too many hardworking families are being shut out of homeownership due to unreasonable premiums that hamper their ability to pay the mortgage and put food on the table.
This announcement is a positive step forward that opens the possibility of homeownership for more Americans, and provides existing homeowners with savings that are critical to securing the financial future of hardworking families across America.
Although Republicans will roundly criticize this move, it’s important to remember that FHA is far from bankrupt, holding approximately $40 billion in reserves and continuing to generate revenue. Moreover, it has taken critical steps to recover its capital reserves, and is projected to show a positive balance in 2015. And while this announcement signals that we are moving in the right direction, we still have more work to do to expand access to credit to more low-to-moderate income and minority families. ”