Monday, January 23, 2017

President Trump moves to suspend FHA insurance premium rate cut

FHA mortgages are backed by the federal government, offering less restrictive credit
and down payment standards to get loan approval. 

In one of his first acts as U.S. president, Donald Trump signed an executive order to suspend a scheduled 0.25 percent rate cut to the FHA program's mortgage insurance premium.

The rate reduction, which would have lowered FHA loan borrowers' mortgage insurance premium rate from 0.85 percent to 0.60 percent, was scheduled to go into effect on Friday. Former President Obama had signed the order earlier this month.

Trump's nominee for the new HUD Secretary, Dr. Ben Carson, has said he will further examine the policy if his nomination is confirmed by the Senate.

Post-election stock rally slows after inauguration

Following Trump's election in November, stocks hit new record highs on expectations that as president he would promote tax cuts, increase infrastructure spending and reduce regulations. The stock rally has slowed in recent weeks, tempered by Trump's recent comments endorsing "protectionist" policies of introducing a border tax on imported goods to the United States.

With more signs of economic strength - lower unemployment rates, increased consumer spending and homebuilder growth - inflation is also on the rise. Some economic analysts are expecting Fed board members to raise central interest rates again by the end of the second quarter of 2017.

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