Trade groups push for lower FHA premiums, LLPA cuts

"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,"

"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."

End the tri-merge credit reporting requirement to allow a single credit report for Fannie Mae- and Freddie Mac-backed loans. Adopt a single-file framework to promote competition among credit bureaus and reduce borrower and lender costs that have risen sharply. Cut FHA mortgage insurance premiums given the Mutual Mortgage Insurance Fund reserve ratio near 11.5%, well above the 2% statutory minimum. Consider lowering the annual mortgage insurance premium or eliminating life-of-loan premiums to provide immediate financial relief and expand access to homeownership. Reduce FHFA loan-level price adjustments and eliminate certain refinance fees to prevent shifts toward FHA and improve housing affordability through broader modernization.

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