Trade groups seek relief to costs making borrowing more expensive

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In addition to MBA, the NAACP, National Association of Real Estate Brokers, National Association of Realtors, National Fair Housing Alliance, National Housing Conference and National Urban League were among the letter’s signatories.

Mills noted the ask was for an across-the-board cut in the mortgage insurance fund, but relief would benefit minority borrowers the most: “FHA is the primary source of credit for first-time minority homeowners,” Mills explained. “FHA is 85% first-time buyer, predominantly minority homebuyers, so it is an affordability move, but one that particularly benefits minority and lower-income homebuyers. This is not a targeted MIP reduction, but it disproportionately benefits minority homebuyers.”

He noted the passage of time has resulted in a now-bolstered Mutual Mortgage Insurance Fund that renders at unnecessary the level of insurance premiums still being charged to borrowers. “This is a direct cost to consumers who are paying a mortgage insurance premium that is still reflecting the experience of the post financial crisis,” Mills said. “Now that funds are at an 8% reserve ratio – which is well above the minimum and is more than is needed to operate the fund in a safe and sound way – essentially, at current levels, the premiums are overcharging borrowers and it’s time to reduce the premiums.”

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 390,000 people. Headquartered in Washington, D.C., the association “…works to ensure the continued strength of the nation’s residential and commercial real estate markets, to expand homeownership, and to extend access to affordable housing to all Americans,” according to its promotional literature. Its membership of more than 2,000 companies includes all elements of real estate finance: independent mortgage banks, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies, credit unions, and others in the mortgage lending field.