Posts Tagged ‘premiums’

FHA may need Bailout After All

April 10th, 2013 Comments off

For the first time in the history of the Federal Housing Administration (FHA), with its mortgage fund a minus $13.5 billion, the agency may need a government bailout by October, as HousingWire tells MHProNews. FHA Commissioner Carol Galante said, “The President’s budget projects that FHA may need a $943 million credit from the U.S. Treasury in October to make certain sufficient reserves are on hand today to cover projected losses over the next 30 years. FHA is taking every appropriate action to reduce the likelihood that such assistance is needed.” The agency may not make a final decision until Sept. 30, and attributes the financial stress to loans insured up to 2009, and to reverse mortgage programs. Housing and Urban Development (HUD) Secretary Shaun Donovan says the projected $13.6 billion shortage in capital reserves has been reduced to $943 million as a result of FHA recovering older loans, increasing some premiums, and making changes to the reverse mortgage program.

(Image credit: HUD-Gov)

Financial Services Committee Chair: Rein in FHA

March 14th, 2013 Comments off

HousingWire informs MHProNews Chairman of the House Financial Services Committee, Rep. Randy Neugebauer, (R-TX), during a committee hearing on the private mortgage insurance market, noted that the Federal Housing Administration (FHA) continues to risk taxpayer dollars. In regard to FHA and its Mutual Mortgage Insurance Fund, he says, “FHA does not evaluate its risk according to actuarial principles; it does not correlate premiums to risk; it does not spread its risk in a manner supported by its financial resources; and it relies on treating poor results as a quarantined anomaly.” While FHA’s $30 billion in reserves is considered adequate to cover potential losses, House Bill 1028 would eliminate putting taxpayers at risk should a bailout be necessary. Neugebauer says the FHA “should be a complement to the private market, not a direct competitor.”

(Image credit: Facebook)

Private Capital, Government Insurance for Multifamily

December 5th, 2012 Comments off

In discussing the future roles of Fannie Mae and Freddie Mac in multifamily housing finance, HousingWire tells us the Mortgage Bankers Association (MBA), in a White Paper, outlined a method for government to attract large private capital. New policies need to be enacted that provide a stability and insurance backstop as the governmental role, and attract private capital as the primary source of funding for multifamily housing. Risk-based premiums would fund the program, as they are paid by those who securitize the loans. As MHProNews has learned, the White Paper asks for ensured access to liquidity in all market conditions, and says MBA will work “with a host of stakeholders and industry groups to advance policy proposals that support a vibrant and balanced housing finance system.”

(Photo credit: HousingWire)

MHC Residents Upset with Insurer

April 25th, 2012 Comments off

Citizens Property Insurance Corp., created by the state to insure manufactured home owners not eligible for private insurance, is coming under fire from the homeowners for raising premiums while cutting coverage. FloridaToday tells Citizens insures 4,500 of the 4,900 homesites in Barefoot Bay and is now the largest property insurer in the state with 1.5 million policies. The community, located at the southern tip of Brevard County, south and east of Orlando, is the largest MHC in the state, as over 300 MHC residents packed a community center at Barefoot Bay to hear Citizens justify ending coverage for carports and screens while raising premiums an average of ten percent. Many were upset hurricane-hardening measures did not reduce their premiums. Christine Ashburn of Citizens said there were no studies to indicate those measures reduce damage to MH during a hurricane. Monte Stevens with the Florida Office of Insurance Regulation, says insurance availability is a major issue for traditional homes as well as MH, and the state is trying to lure more insurers in an attempt to lower premiums. He also says Barefoot Bay has been undercharged in the past. Members of the homeowners association say they will research the possibility of starting their own insurance company.

(Photo credit: FloridaToday/Tim Shortt—MHC residents at meeting)

Underwater Borrowers: A Chance to Breathe Again?

December 22nd, 2011 Comments off

OriginationNews tells MHProNews that after a two-year study, a Columbus, Ohio-based insurance company has introduced the Home Value Protection(HVP) plan to offer a modicum of protection to homeowners interested in refinancing or taking on a new mortgage. In light of the negative equity many homeowners face, Home Value Insurance Co. offers insurance against home devaluation due to local market conditions. With monthly premiums usually less than $50, homeowners can recoup the difference between the value of the home at the time the insurance is purchased and the amount for which the house is sold. Available for primary, owner-occupied single-family homes and condominiums, the program has been approved by the Ohio Department of Insurance. The policy will cover losses up to 25 percent of the home’s value, but with a ten percent deductible if the house is sold after the first year of coverage and five percent deductible if sold after the second year. The initiative fits nicely with the Home Affordable Refinance Program to allow homeowners to take advantage of low interest rates.
(Photo/graphic credit: Bankrate)