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1/18/2017

Trump May Hold Your Closing Hostage

Did you Lock in an FHA loan with lower MI?

FHA LOAN in 
the hopper?
You may get STUCK 



Inauguration and new Administration May Stall YOUR FHA loan 
closing BEWARE!  Oh no !  
This could be unwound before it starts. If the President retracts the MI reduction right after the 20th we will have stuck borrowers.  
As we know, President elect Trump may have different ideas on how HUD should work and is creating much uncertainty.  If you locked, re-disclosure with higher numbers may be impossible. Is this a legal change of circumstance?  Lender would have to pay the increase for life of
loan.  The current laws, lovely Dodd Frank, require Loan Estimate to be exact and
Closing Disclosure can't go up, only down. If Trump cancels the reduction in MI,
he may hold your transaction hostage until Mnuchin figures out the granular nitty 
gritty grass.

Stay tuned borrowers, 
the corresponding articles now surrounding this topic. It makes having tough conversations on the 26th easier should this occur.  My advice to mortgage lenders is do not disclose the lower MI, don't write this product until we find out what the new
boss will do.


Based on recent testimony and political pushback, we believe there is a strong chance the most recent MIP reduction (as published in HUD Mortgagee Letter 2017-01[MBA.informz.net]) may be one of the rollback actions[MBA.informz.net] taken soon after President Trump takes office. This change will likely be effective immediately, and could create significant operational challenges for lenders and their customers. Given this information,  consider the contingency steps that would be necessary to unwind any changes that have already been made to adjust for the reduced MIP rates if this reversal is implemented.