Committee Chair Frank Wants MI Premiums Cut on 'H4H'

House Financial Services Committee chairman Frank Barney, D-Mass., is urging the Treasury Department to reduce the cost of mortgage insurance premiums on the FHA's "Hope for Homeowners" program by using money from the Troubled Asset Relief Program. In a new letter to Treasury, Rep. Frank urges the secretary Henry Paulson to use the TARP funds to reduce the "high level" of upfront and annual fees on H4H loans. The Federal Housing Administration is required to charge a 3% upfront and a 1.50% annual premium. "These high fees are depressing program usage, and using TARP funds to pay them down could significantly increase the number of foreclosures averted," Rep. Frank says in the November 20 letter. (On a regular FHA loan, the upfront premium is 1.75%. The annual premium is 55 basis points.) The committee chairman also wants Treasury to begin purchasing whole loans on a "large scale" for the specific purpose of modifying the loans and keeping the borrowers in their homes."