Not only is Trump keeping the government from underwriting bad debt, he's also keeping people like you from profiting off of people that should not be borrowing the money in the first place.

Maybe you could consider lending to people who have enough money saved to put a decent downpayment on a home, or accept that the rest of the country doesn't want to subsidize the insurance for writing bad loans. Or you could get a job doing something productive, instead of being a needless cog in an outdated lending system?

Don't brake check the Trump train. The Trump train has no brakes.

Yup, I paid PMI on my first house.  If the financing doesn't make sense its because you are a credit risk and home ownership isn't going to work out anyway.  Rent and avoid the stress of default.

Aren't these the same people who bailed on their home loans before and caused a housing  market collapse. Low income and first time buyers.

First I will address your post...The proposed reduction rules were changed by Obama 11 days ago.  Today the proposed reduction was deleted.  So were talking about 11 days worth of business.  You have to tell your borrowers from the past 11 days that they will not get a reduction that was never there, but only proposed.  Did you disclose this in writing?  Law wasn't changed, but was proposed to be changed on Jan 27.  Did you mention that a regime change was to take place today that could delete the proposed change?  I bet you have disclosures in your paperwork about rate changes.  As for first time home buyers and lower income folks, nothing really changed here, you told them it was changing but it was a proposed change, not a reality.  No brainer seldom applies, and this is no exception.  The no brainer to those with a brain would have suggested that you disclose to borrowers that the reduced MIP might not actually change.  

Second, I will remind you of history, and specially the history of FHA, what it does and what it doesn't do.  FHA does NOT MAKE LOANS.  Read that again.  They don't make loans.  It was a program incepted in 1934 (like a lot of other things incepted in 1934).  FHA insures mortgages.  A mortgage is a loan.  Lenders make loans (banks are lenders).  FHA is an insurance agency backed up by the federal government.  That means they can tap the treasury (tax dollars) if they need money.  They sell insurance to lenders.  Get that?  They sell insurance to people with money to lend on homes.  People with money who lend it to strangers don't like doing it unless the borrower has good credit and will likely pay the whole thing back plus this little thing called interest (rent on money).  Banks/Lenders/People with Money to lend to strangers like insurance.  The insurance protects the person with the money to lend so they feel comfortable taking the risk.  See that word...RISK.  Not the board game with little plastic soldiers...RISK OF LOSING MONEY.  Lenders make money on interest.  They don't like risk.  They want to make money FOR SURE.  Back in 1934 there were very few if any private insurance companies who would write policies for mortgages.  There was no credit ratings back then.  So the government stepped in and promised (with insurance backed by the treasury) that lenders wouldn't have to take the RISK if they bought federally backed insurance from FHA.  What a great idea!  People with money would be glad to lend money to strangers if they were SURE to collect the interest and could buy insurance if the investment failed.  But wait.....

The investor/lender/bank wasn't about to pay for this insurance.  During that time lenders typically loaned HALF the value of the property.  That is a LTV of 50% (loan to value ratio of 50 cents on the dollar).  The cost of the insurance had to be passed on to the person renting the money, not the lender.  So when the government stepped in and offered this insurance, the price had to be pushed to the person borrowing the money.  Are you understanding how this works yet?  A bank is loaning you money and charging interest (rent on money) and the treasury is going to back up the bank if you fail to make the payments.  The bank is going to make money on the interest and they are going to make YOU pay for the insurance in case you don't meet your obligations under the terms of the loan.  IF you don't pay the loan back the bank sells your property at a foreclosure (usually an auction sale and the bank always bids the outstanding balance you owe plus fees) and calls the insurance company (FHA in this case) and files a claim that is the difference between the foreclosure sale price and the amount you owed (plus attorney fees, etc...).  This is when the insurance "kicks in."  The insurance is not for YOU but the bank/lender/investor who makes the loan.  The insurance pays the lender back its ACTUAL losses.  This insurance has a price.  The price varies greatly depending on many factors...Read on...

Since you now understand that FHA doesn't make loans, they only insure them you understand that borrowers are forced to pay for insurance that protects the primary risk taker, the lender, against your failure to pay.  Using complex formulas, algorithms, and other methods, the insurer (FHA) charges a price for this insurance.  Over the years this price has varied.  Terms have change much since 1934.  The 50% LTV ratio has increased to as much as 96.5%!  Thats right, the lender will take nearly 97% of the risk while the borrower only takes 3.5% of the risk.  That is a far cry from only HALF the risk from 1934.  The RISK that FHA has agreed to insure has increased to almost TWICE what it would originally have agreed to.  Read that again...no really...read that again. The RISK that FHA has agreed to insure has increased to almost TWICE what it would originally have agreed to.  Remarkable huh...

SO the Mortgage Insurance Premium (MIP) is a price BUYERS/BORROWERS pay to INSURE that lenders get paid back what they lend.  Seems fair right?  After all lenders are taking up to 96.5% of the risk.  The truth is that the lender is really paying for your home and you are renting the money from them.  The rent is the price of the interest and the insurance cost is passed on to YOU the BORROWER (along with other costs like lender required home owners insurance, maintenance of the property, HOA fees, real estate taxes, etc...).

As you make your payments and your home increases in value over time (hopefully) your LTV decreases.  You build equity in your home.  Your home may double or triple in value over time.  You are still making payments and on time.  Good for you.  At some point your MIP is no longer necessary.  Most of the time this point is when you have and 80% LTV.  The lender no longer really needs this insurance they make you pay for.  So they just call you and tell you the good news that your house payment is going to decrease.  You think that is going to happen?  I didn't think so.  In late July of 1999 (due to law changes) the rules on MIP and PMI (basically the same thing) changed.  On mortgages signed after this date, lenders had to stop charging for this insurance if you met the requirements in the law.  There were basically three ways to effect the change, but you got a cheaper payment every month because they passed a law (and it actually went into effect) that forced lenders to stop charging for the insurance.

Enter the housing crisis of 2008 (the reasons this occurred will not be covered as this post is long enough already).  FHA insured mortgages became a real issue for the American people.  By 2012 FHA foreclosure rates hit more than 1 in 3.  That means that the people who loaned the money (banks/lenders/investors) were about to start using the insurance.  And when they did in 2013, FHA went broke.  The federally backed program that never needed taxpayers dollars (money from the treasury) since 1934 was bankrupt.  The treasury footed the bill.  They paid it.  People still lost homes, but banks/lenders/investors got paid back.  

In mid 2007 the upfront cost of FHA insurance was 1.5% of the sales price (depending on LTV).  This was added into the loan when it could be (meaning the appraised price was higher than the sales/refinance price) and paid out of pocket when it couldn't be added).  The yearly cost was half a percent.  When you hit 78% (80% if you called the lender) your insurance was dropped.  Your upfront cost in mid 2008 was changed to 2.25% (a 150% increase technically) and your per year was increased to .55% instead of .50%.  You could still demand the insurance was removed when LTV hit 80%.  This remained until 2010 when upfront dropped to only 1% buy yearly cost for the insurance increased to .9%.  SO they charged less up front but cleaned house on the yearly fees.  In 2012 they increased the upfront to 1.75% and the yearly to 1.25%.  At this point you could still demand the insurance was removed when LTV hit 80%.  In 2013, under OBAMA, they changed the insurance rates again, the upfront rate stayed the same and the yearly premium went up slightly to 1.35%.  The killer was you had to pay it no matter the equity in your home.  The LTV didn't matter anymore if you got a 30 year loan with only 3.5% down.  You could never stop paying for this insurance.  If you owed $18,000 on a $400,000 home you still had to pay for insurance if you signed your loan in 2013.  Obama gave us that.  Read that again.  Obama raised rates and screwed you on insurance.  The rate of 1.75 up front is still there.  The yearly is .85% now and was proposed to change to .60%.  Obama is responsible for proposing the yearly rate change and doing so at a time when it would be easy for a new president to change it.  The change proposed was only .25% but in 2013 he screwed FHA insured home loan borrowers in that they would never be able to stop paying for insurance they no longer need.  A quarter of one percent change on a mortgage amount won't make or break anyone buying insurance to protect the lender.

That shit is way too smart for the two or three retards in this thread.

OP is probably a paid troll.

So Trump backed out a last-minute plan by Obama to use more of my tax money to further subsidize people's ability to take out home loans they probably can't afford?

Having a hard time getting pissed off about it.  Buy a cheaper house if you need to leave room for a PMI payment.

You would prefer the misery of Russia, Venezuela, Brazil?........because that is where ALL communist/socialist policies eventually end up.

Go sit in the corner and be quiet

What a great post. Thank you so much for that.

Stop trying to screw up our economy again by selling homes to people that clearly can't afford them.

Excellent post!

This 

The government paying to keep people working via a program that increases the possibility of another housing crash is a stupid fucking idea. 

That is a lie OP........it removed a proposed cut.

Are you a democrat?

Boom!!!!! Mic drop

You sound like cnn. Doode it's 500 bucks a year for FHA peeps. Like 41 bucks a month. So totally doode.

I am okay with this, either come up with 20% down or just refinance after a couple of years.

Tell them they can use all the money they save on health care. And buying .22.

Op was supposed to put this thread in du forum

Congrats on outing yourself as a Socialist OP.

Awaiting the field of gored oxen...

MAGA

No Kidding, get the fuck out of here OP with your FSA bullshit.

Yep! This! Why should the taxpayer fund your business and others home purchases. No one funded mine. I worked for it. You need to work for the business you get and not expect me and every other tax payer to fund it. If you can't afford it find something you can! Now you spin this

Good for Trump

SPNI

Thank you.

Well OP we gave $600,000 loans to people making $50,000 in 2007.   How did the housing bubble work out?  My first mortgage for a house was at 10.5% and if you made $30,000 a year you might qualify for a $60,000 loan and people still bought homes.   So you are basically bitching about the government taking money from x to give money to y and y can't afford it in the first place.  You sir, are the problem.

Here's an idea OP

You and your business fund the .25% point. That should be easy enough. Look at the money you ripping people for. When we need to move some product we offer deals. My distributers and the manufacturers don't fund that and Uncle Sam sure as heck doesn't .

What is your real member name, not your shit posting account.  

How did Trump cancel this?  He only signed one Executive Order so far and it was not this.  Do you have a link?

Soooo, OP is DU Shill?

I thought this was only a proposal from Obama's HUD administration, and Trump's said "Nope".

Meh, OP should stop expecting the American taxpayer to hedge the bets on his shitty loans.   

MAGA!!!!

We president now. MAGA.

Thanks, I should have read the whole thread.

I don't know what world you are in, but 90% of those guys aren't even here legally.

government stops paying for houses for people who can't afford them, butthurt ensues.

That's not true. He just reinforced what the OP had already done himself

Second post nails it.  If the market wants cheaper loans it will provide them without the .gov meddling.

Why do you have free markets OP?   Why do you love big government solutions?

lol

Desire to know more overload.

But by all means keep selling those junks loans given to bad pay's.  What could possibly go wrong?

How can you be so entitled and stupid? It nearly destroyed the economy once and you want to repeat everything that made that happen.

Taken to school...hope you were simply taken in by the Trump haters than are actually one...

Lesson Learned?

Thank you so much for your explanation...and lesson...very greatly appreciated.

The whole thing was simply Obama taking a crap in the White House for Trump incoming administration to be soiled with...

Obama is the biggest Ahole on the face of the earth...well at least in the top 2....right behind Satan...

It doesn't work that way.

If you are W2, they just look at your wages and then there is a ratio in which tells you how much you can afford.

If you are self employed, they are pretty much just looking at your AGI, some folks back out non cash expenses such as depreciation, but not all banks/mort companies do that.

So, let's say I am W2 I get paid 100k a year and I have zero debt, then it shows 100k as my income

If I am self employed, and I have 100k earnings, I then write off my 65k F-250 via special bonus deduction Rule 179, then I have some more depreciation of about 10k from my office building, then I have my cell phone bill, internet and tv for the office, $4000 a year, Fuel for the truck, insurance for the truck, SO, that 100k in actual dollars you put into the bank is not viewed as 100k, more like 21k worth of income.

OP still with us? 

This is the answer. If the difference in insurance premiums on an FHA loan makes the loan not affordable, then the person has no business buying a house.