U.S. Senator Bob Corker (R-Tenn.), a member of the Senate Banking, Housing and Urban Affairs Committee, commented on President Obama’s decision to reduce annual insurance premiums for mortgages insured by the Federal Housing Administration (FHA).
“This decision is bad news for taxpayers and is yet another irresponsible, head-scratching decision from the administration in regards to our nation’s housing finance system,” said Senator Corker. “In December, Fannie Mae and Freddie Mac took steps to compete with FHA, and now FHA is reducing premiums to compete with Fannie and Freddie. The federal government should be winding down its involvement in the mortgage business, not engaging in a race to the bottom, and it is absolutely imperative that Congress follow through on housing finance reform this year.”
The administration’s decision comes while FHA holds just .41 percent in its capital reserve, well below the two percent statutory minimum, and in the wake of a yet to be repaid $1.7 billion 2013 FHA taxpayer bailout.
In December, Fannie Mae and Freddie Mac reduced down payment requirements to as little as three percent for some borrowers.