Trump’s First Move as President: Screwing Over Homeowners

The administrative order will end Obama’s efforts to cut premiums on FHA-insured home loans.

Patrick Semansky/AP

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


Earlier this month, then-President Barack Obama issued an executive action requiring the Federal Housing Administration to decrease insurance premiums on FHA mortgages, a change that could have potentially saved low-income homeowners as much as $900 per year. In his first administrative order as president, President Donald Trump suspended this Obama order, which was slated to go into effect on January 27. In practice, this means that low-income homeowners will be stuck paying higher insurance premiums on their FHA-insured mortgages.

FHA loans enable homebuyers—often those with lower incomes and who have fewer assets or bad credit—to bypass conventional lenders who would likely deny them loans by taking out a mortgage that’s insured by the federal government. The borrowers have to pay FHA mortgage insurance, to protect the mortgage lender from a loss should the borrower default on their home loan. In his announcement of the change, Obama said the drop in premiums would help stabilize the housing market and spur growth in housing markets still recovering from the financial crisis.

At his confirmation hearing last week, Ben Carson, Trump’s nominee to lead the Department of Housing and Urban Development, which oversees the FHA, said he was concerned about the Obama administration’s last-minute implementation of this insurance premium drop and would reexamine it. “I, too, was surprised to see something of this nature done on the way out the door,” Carson told members of the Senate Banking, Housing, and Urban Affairs committee. “Certainly, if confirmed, I’m going to work with the FHA administrator and other financial experts to really examine that policy.”

Presidential executive orders require no congressional approval to pass or overturn. Trump has vowed to eliminate all of Obama’s executive actions during his first days in office. This may be his first step toward fulfilling that promise.

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and billionaires wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

Fact:

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2024 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate