Vault full of FHA money.

Last year, the Department of Housing and Urban Development announced a .50% reduction in the annual mortgage insurance premiums for most FHA-backed loans. Experts now wonder whether the FHA will follow with an encore. RealtyTrac staffer Peter Miller takes a look at the possible actions the FHA can take to sustain mojo in 2016. 

One suggestion, further lowering the annual MIP from 0.85% to 0.55%:

First, the reserves are doing remarkably well. Second, the reserves are likely to keep doing well because FHA foreclosure rates are falling through the floor. For instance, in May 2012 there were 30,158 FHA foreclosure starts versus 11,544 in October 2015. Third, if the FHA drops the annual MIP again it will attract hordes of new borrowers who will instantly pay 1.75 percent of their loans into the program in the form of the up-front MIP.

To learn more about the FHA's mortgage plans for 2016, head over to RealtyTrac:

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