The new head of HUD speculated that FHA mortgage insurance premiums may need to increase in the future in order to keep the FHA from going in the red. Here are some bits from a recent Bloomberg article on the subject:
Insurance premiums for mortgages guaranteed by the Federal Housing Administration may rise as the Obama administration looks for ways to shore up the agency’s finances, Housing and Urban Development Secretary Shaun Donovan said.
“It’s likely that you’ll see further changes in the coming months,” Donovan said in an interview following an event today in Washington held by Bloomberg Ventures, a unit of Bloomberg LP, parent of Bloomberg News. “A number of the steps that we are looking at that are possible around the mortgage insurance premium would help to accelerate FHA stepping back as the private market returns.”
Donovan said FHA will likely make program recommendations when it submits its budget request for fiscal 2011 to the president and Congress early next year.