The Federal Housing Administration plans to raise the annual fees it charges new borrowers starting Sept. 7, which would add about $300 million a month to the agency's eroding cash reserves.
The FHA does not make loans but insures qualified lenders against losses should loans go bad. By doing so, it enticed lenders that had retrenched to reenter the mortgage market, providing crucial support to the housing market. In the past 18 months, about 30 percent of new single-family home purchases and about 20 percent of refinancing deals were backed by the agency.
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