WASHINGTON — After the inauguration and a friendly congressional luncheon with the new commander in chief, Senate Minority Leader Chuck Schumer (D-N.Y.) accused President Trump of doing a “terrible thing” to homeowners with one of his first executive actions.
The Department of Housing and Urban Development issued a letter Friday to all FHA-mortgagees as well as the lending and housing industry advising that reductions in the mortgage insurance premiums for loans closing or disbursing Jan. 27 or later have been “suspended indefinitely.”
The suspension applies to “all FHA Title II forward mortgage programs,” excluding Indian and Hawaiian home lands.
“In one of his first acts as president, President Trump made it harder for Americans to afford a mortgage by reversing a recent decision by the Department of Housing and Urban Development to reduce annual insurance premiums that many borrowers pay – saving new homeowners an average of $500 per year,” Schumer said on the Senate floor.
“What a terrible thing to do to American homeowners. President Trump, with the flick of a pen, ended that new policy, making it harder for Americans of modest means to obtain their piece of the rock, the American dream – home ownership,” he added. “It only took an hour for those populist words delivered on the steps of the Capitol to ring hollow. Actions always speak louder than words.”
Schumer told the new president that “Democrats agree with President Trump on this – the working man and woman of America do not need more promises.”
“They need policies that give them a leg up. Help them succeed. Help them afford a home, for instance,” he said. “We urge President Trump to reverse this decision and give new homeowners across America their $500 dollars back.”
The mortgage-fee reduction had been announced just 11 days before the inauguration, and was supposed to go into effect on Jan. 27.
That HUD letter told borrowers and bankers that the Federal Housing Administration determined “that the appropriate balance of its statutory operational goals now requires a reduction of the rate of annual MIP.”
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) had slammed the reduction as a move that would put the FHA “in a more precarious financial condition.”
“It seems the Obama administration’s parting gift to hardworking taxpayers is to put them at greater risk of footing the bill for yet another bailout,” he said last week. “…Playing politics with the FHA through cynical, surprise 11th-hour rule changes is irresponsible and endangers the integrity and success of the FHA.”
Outgoing HUD Secretary Julian Castro told reporters at the time of the announcement that the Trump transition team had not been briefed on the decision but he had “no reason to believe” the new administration would roll it back.
The premium cut, Castro said, “offers a good benefit to hardworking American families at a time when interest rates may well continue to go up, so I don’t believe that this is going to be scaled back.”