Trump signs executive order targeting mortgage insurance and refinancing costs
Bob Broeksmit, Mortgage Bankers Association (MBA) president and CEO, who has pushed for lower credit reporting costs, welcomed the order.
“MBA appreciates the Trump administration’s continued focus on lowering housing costs by reducing unnecessary regulatory burdens, streamlining mortgage processes, and promoting competition across the housing market,” Broeksmit said. “Our lender members welcome these latest initiatives to reduce the costs of refinancing and expand innovative manufactured housing options for potential homebuyers.”
What the order does
The order has four main parts. It sets up a pilot program for proactive cancellation of mortgage insurance using automated valuation models (AVMs), expands the title insurance waiver pilot on refinance transactions, creates a Task Force on Manufactured Housing Innovation, and directs the Departments of Agriculture and Veterans Affairs to reduce interest rates on their direct single-family loan programs.
The order tells the Federal Housing Finance Agency (FHFA) director to have Fannie Mae and Freddie Mac build a pilot that uses AVMs to periodically check current home values on loans they own and proactively cancel mortgage insurance when a borrower appears to have enough equity. Servicers would have to tell borrowers when cancellation may be on the table.
An existing pilot that lets lenders use automated title reviews on certain refinances instead of a title insurance policy would expand under the order. It directs the FHFA to raise the current 80% LTV ceiling for eligibility, bring in more providers, drop geographic limits, and waive appraisals and income re-verification for limited cash-out refinances that lower the borrower’s monthly payment, with any savings going to the borrower.
