Housing and Economic Recovery Act

FHA Hikes Mortgage Premiums 

Without the benefit of a more refined risk-based pricing structure, the Federal Housing Administration said earlier this week that it would hike its upfront mortgage premiums for all purchase money mortgages and full-credit qualifying refinances. In a letter to lenders, FHA said it would add 25 basis points to its mortgage premium, bringing the upfront premium charged to most borrowers to 1.75 percent of the total loan amount. That change would amount to an additional $500 up-front charge on a mortgage of $200,000.