Frank to HUD: Drop Risk-Based Premium Move

House Financial Services Committee chairman Barney Frank, D-Mass., is urging the Department of Housing and Urban Development to drop its initiative to start charging risk based premiums on FHA-insured 1-4 family loans next year.Congress is close to passing a Federal Housing Administration reform bill that authorizes risk-based pricing, Reps. Frank and Maxine Waters, D-Calif., say in a letter to HUD secretary Alphonso Jackson. "We are particularly surprised to see HUD acting unilaterally to implement risk-based pricing before waiting for Congress to complete action on this legislation -- especially since your proposal differs from the bill passed by the House," the Nov. 2 letter says. The Democrats sent the letter the same day that chairman Frank engaged FHA commissioner Brian Montgomery in a sharp exchange over risk-based pricing. The commissioner indicated that FHA needs RBP to avoid increasing mortgage insurance premiums on all borrowers, Mr. Montgomery said. The FHA is "perilously close" to raising premiums, mainly due to defaults on loans with downpayment assistance, Mr. the commissioner said.