Mortgage fees could rise

June 11, 2010|Alan Zibel, Associated Press

WASHINGTON — Higher monthly fees could be in the works for consumers who take out home loans guaranteed by the Federal Housing Administration, the primary source of mortgages for first-time home buyers.

The House approved a bill yesterday that would give the FHA power to increase monthly premiums it charges to consumers. The vote was 406 to 4, but it was unclear whether the Senate would follow suit.

Officials say the agency needs to stabilize its finances, which have deteriorated because of the foreclosure crisis.

The agency does not make loans, but offers insurance against default. Borrowers pay extra fees because FHA-backed loans require down payments of only 3.5 percent.

Under the changes being considered, a borrower with a mortgage of $170,000 would pay an extra $42 a month. The fees would bring in $5.8 billion in new revenue next year.

“It’s going to cost everybody a little more money,’’ said David Stevens, the agency’s commissioner. The agency, he said, “was never meant to be, nor should it be a bailout program.’’