Trump government immediately backtracks on federal mortgage insurance cuts
After it was announced last week that the largest Canadian mortgage insurers would be raising prices on their premiums, the US has decided to take its policy in a similar direction. Just hours following his swearing-in as the 45th president of the United States of America, Donald Trump signed a regulation that suspended a rate cut to the Federal Housing Administration's mortgage insurance fees.
The initial cut called for premiums on mortgages for low-income Americans to go down by a quarter of a percentage point, which would have left the rate at 0.60 per cent. Instead, it will remain where it previously was and ensure that cut, which was supposed to have come into effect on Jan. 27, will never see the light of day.
This mortgage fee reduction was one of the many last-minute legislative tweaks that the Obama administration made sure to enact during its final days in control of the government.
While it is unsurprising that Trump's team was eager to undo action taken by Obama's Democrats, this particular move, which came just barely after Trump addressed the American people with a rhetoric of populist empowerment, seems to run counter to the new president's supposed vision. The move will make it more difficult for homebuyers to pay for their homes. For example, for someone borrowing $200,000 a year, the cut would have given them a $500 discount in that first year.
Senator Chuck Schumer, the only Democratic representative to speak during Trump's inauguration, denounced the move, saying that, "It only took an hour after his positive words on the inaugural platform for his actions to ring hollow."
Incoming Housing and Urban Development Secretary Ben Carson (pending approval) has stated that he was not consulted on Obama's regulation, nor was he happy about it.