Cut Off At The Pass

It is reported in MPA Magazine that the provision of the Transportation, HUD and Related Agencies Appropriations Act for Fiscal Year 2015 (S. 2438) which would have allowed the Department of Housing and Urban Development / Federal Housing Administration to impose an additional 4 basis point fee on lenders for loan originations has been eliminated.  George Souto  first reported that this fee was included in Senate Bill 2438 in post dated December 2, 2014.

Several concerns that led to the elimination of the fee were that it was not included in the House version of the bill, the fee was apparently intended initially at least, to be retroactive, and the fee was not capped at the $30 million amount needed by FHA to upgrade its systems.  In addition the fee did not take into consideration that Congress had allocated $8 million of the $30 million needed.  In fact there was no cap or time limitation on the proposed fee.

The charge to overturn the fee was led by the Mortgage Bankers Association.  They were joined by the American Bankers Association, American Land Title Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, Leading Builders of America, and the National Association of Federal Credit Unions.

This is a relief in light of the high mortgage insurance premiums charged by FHA.  Those fees alone are stifling home buyers who would otherwise benefit from FHA's loan programs.