Trump Administration Creates Mortgage Problems For Potential Homeowners

Picture of a home

Donald Trump shortly after becoming President of the United States signed an administrative order to stop a fee rate cut for mortgages from going into effect. This fee rate cut would have saved potential home buyers who do not have the funds for large down payments – significant amounts of money. As a result of the action taken by the Trump administration 40% of all millennial home buyers will find it more expensive to pay their mortgage.

The Actual Events

A few hours before Donald Trump was sworn in as President he signed an order which set aside action taken by the Obama administration that would have lowered monthly fees for prospective homeowners who buy homes and have less than 20% of the cost of the home to pay as a down payment. These prospective home buyers who do not have 20% to put down for the purchase of a home use a government program operated by the Housing and Urban Development Department known as “FHA Loans” to insure their mortgages. The decrease in the cost of the FHA fees would have saved the average prospective homeowner who takes out an FHA backed mortgage in the State of New York about $1,000.00 a year.

The FHA loan fees were raised during the height of the real estate crisis. The action was taken to cover short falls within the FHA program. The action taken by the Obama administration was designed to bring the FHA costs to the level they were at before the housing bubble crisis took place. The action by Donald Trump has the impact of reducing the buying power of prospective homeowners. The amount of money that could be used for mortgage payments will be reduced by the approximately $1,000.00 a year that has to be paid for the FHA insurance fees.

Mortgage Insurance

Prospective homeowners who do not have 20% to put down as a down payment on a home must buy mortgage insurance. This mortgage insurance covers the potential losses to the financial institution if they are unable to make their mortgage payments. This is necessary because when homeowners do not have 20% to put down on their home there is often insufficient equity in their homes for banks to cover their potential losses in the event the home is foreclosed upon and sold.

Attorney Elliot Schlissel

FHA loans are most often utilized by young home purchasers. Almost 40% of all home purchases by younger purchasers are FHA backed loans.

Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick, Bellmore

We represent individuals throughout the New York Metropolitan area with divorce and child custody, personal injury, car accident, wrongful death, estate administration, nursing home and medicaid issues

The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your particular legal issue. This is attorney advertising.

Copyright © 2017 By The Law Office Of Elliot Schlissel. All Rights Reserved. Concept, Design and Hosting by GetLegal Web Development Team.