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Friday, October 30, 2015

FHA Audit Could Spark Demand for Another Premium Reduction

A soon-to-be-released report on the financial condition of the Federal Housing Administration's mortgage insurance fund is likely to provoke demands that the agency make another premium cut. The report from independent auditors will likely show that FHA remains below its 2% statutory minimum capital ratio, but HUD officials and outside observers still expect it to show major improvement over last year.

Quarterly reports indicate that the insurance fund is benefiting from higher loan endorsements because of the Department of Housing and Urban Development's decision to reduce FHA's mortgage insurance premiums early this year.

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