The Housing Industry Under Trump

 In First-Time Home Buyers, Qualifying for a Mortgage, Refinancing your Mortgage

There are now slightly more than two months until the election, and despite the reluctance of many people to think about that, we as a nation need to think about it.  Here are my thoughts on how Trump has treated the citizens of the country regarding the housing industry.

On January 9, 2017, the Department of Housing and Urban Development (HUD), which oversees the FHA loan program, reduced the annual mortgage insurance premium by 25 basis points, or .25%.  On a $400,000 mortgage, that comes out to $1,000 for the first year alone.  Mortgage insurance never goes away with FHA loans if you don’t put 10% down, so it would have been a tremendous savings for homebuyers.  HUD said that they reduced it to “meet the housing needs of the borrowers that FHA’s mortgage insurance programs were created to serve.”  In other words, to help the citizens of this country who wanted to purchase a house.

On January 20, 2017, the very first day of Trump’s presidency, he took away that mortgage insurance reduction.  The reason was to protect “all parties involved, especially our taxpayers.”  In other words, people with little money down would have to pay tens of thousands of dollars more to own a house.

Two weeks ago, Trump appointee Mark Calabria, the Director of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, the companies that purchase the vast majority of conventional (non-FHA) mortgages, added a 50 basis point fee to all conventional refinance transactions.  That means everyone who refinances into a conventional loan gets to pay .5% more for their loan in points.  On a $400,000 mortgage, that is $2,000 more.  

So Trump cost homeowners lots of money the first day he was in office, and he cost homeowners lots of money as we near the election four years later.

The most appalling part of the latest move to add .5% to refinances is that the Federal Reserve, our central bank, has been purchasing mortgage bonds from Fannie Mae and Freddie Mac to force interest rates lower.  Low interest rates means more people can afford a house.  Trump has no control over the Fed, but he is able to negate their actions to aid our country by having his appointees do the exact opposite of what the Fed is doing.

The question is, do you feel better knowing that HUD, Fannie Mae, and Freddie Mac have billions of dollars more in their accounts, or would you prefer to have more people able to afford a mortgage?  Real estate agents – are you happy that Trump makes it harder to purchase and refinance a house?  Homeowners and homebuyers – are you happy that Trump takes money out of your pocket to line the pockets of the Washington movers and shakers?

I would never vote for a presidential candidate simply because his policies would help me make money.  I don’t want a government that’s “run like a business.”   I want a government that is compassionate.

I also don’t want a leader who lies constantly, shows no respect for women, is a racist, tries to stop a fair election, treats people from other countries like animals, treats my fellow citizens who don’t look exactly like him horribly, ignores a pandemic, and serves only himself.  I don’t want to live in a country that accepts a leader like that.  I also don’t want to move to another country because that’s not the American way.  The American way is to realize when things have grown intolerable, and vote the leaders who have allowed things to get intolerable out of office.

If you want lying and cheating and racism and greed and selfishness to be the American way, by all means, vote for Trump.  If you don’t want any of that any longer, vote for Biden – not because he is the panacea to all those things, but because he is not those things.

And please don’t vote for someone other than Trump or Biden.  This election is about who we as a country want to be.  It is about whether we want Trump or not.  Voting for someone other than Trump or Biden is a vote for Trump.  We can either be followers of the Trump way, or we can decide not to be.  So make your vote count – make sure you vote and make sure it’s for either Trump or Biden.  This is not the time to sit on the sidelines and it’s not the time to try to prove a point about the weaknesses of a two-party political system.

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