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Obama Touts Lower FHA Premiums, Vet Homeowner Relief

A week before the presidential primary season may well crystallize, the Obama administration revealed Tuesday that it will slash refinance fees for homeowners with loans backed by the ""Federal Housing Administration"":http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory (FHA) and relieve veterans wrongfully foreclosed upon by servicers.

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The ""White House"":http://www.whitehouse.gov/ said in a statement that the FHA will slash upfront mortgage insurance premiums to .01 percent for those streamlined refinance loans originated before June 2009 and cut annual fees by half to .55 percent.

The administration estimated the changes could impact as many as 2 million to 3 million borrowers with FHA-insured loans, with borrowers able to save close to about $100 each month.

├â┬ó├óÔÇÜ┬¼├àÔÇ£No red tape. No runaround from the banks,├â┬ó├óÔÇÜ┬¼├é┬Ø ""President Barack Obama"":http://www.whitehouse.gov/administration/president-obama said in prepared remarks. ├â┬ó├óÔÇÜ┬¼├àÔÇ£If you├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óve been on time on your payments, if you've done the right thing, if you've acted responsibly, you should have a chance to save that money on your home ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô perhaps to build up your equity, or just to have more money in your pocket that you can spend on businesses in your community.

├â┬ó├óÔÇÜ┬¼├àÔÇ£That would make a huge difference for millions of American families,├â┬ó├óÔÇÜ┬¼├é┬Ø he added.

The changes come just as the FHA announced premium increases for lenders last week, with some of the fees in line with a short-term payroll tax cut extension passed by Congress in December.

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Speaking with _MReport_ Monday, FHA Acting Commissioner ""Carol Galante"":http://portal.hud.gov/hudportal/HUD?src=/about/principal_staff/assistant_secretary_galante called the premium increases ""extremely modest"" and ""something we think will help the [Mutual Mortgage Insurance Fund] in the short term without damaging the markets.""

Other policies unveiled by the Obama administration Tuesday will extend relief to military service members and veterans that lost their homes to signing errors with servicers.

The relief package touts benefits from the $25-billion servicer settlement, including foreclosure reviews for service members, compensation for those denied by servicers for loan modifications, and relief for others forced into short sales despite permanent station changes.

The White House also said that it would channel $10 million to a fund under the Department of Veterans Affairs that backs loans with favorable terms for veterans and extend protections listed under the Servicemember Civil Relief Act to those who served in combat zones.

The administration billed the housing benefits as several in a series rolled out by the president since he first announced changes in the State of the Union address in January.

Phrases familiar to the president's housing policies made it into a fact sheet published by the White House, with emphasis in particular on relief for ""responsible homeowners"" and veterans who served in combat.

Signaling a stab at campaign rhetoric ahead of Super Tuesday, the fact sheet made a veiled reference to on-again, off-again frontrunner Republican presidential candidate ""Mitt Romney"":http://www.mittromney.com/s/mitt-ann-2012 by saying that ""homeowners should not have to sit and wait for the market to hit bottom to get relief.""

Romney said in an ""interview"":http://www.youtube.com/watch?v=S1SCUA_sWmY with the _Las Vegas Review-Journal_ last fall that he would prefer to let the housing market ""hit bottom"" as the foreclosure crisis resolves itself, a fact Obama continues to reportedly harp on in speeches.

[_Editor's Note: To see the full, exclusive interview with FHA Acting Commissioner Carol Galante, ""click here"":http://thefivestar.com/mrptsubscribe/template.php to subscribe to_ MReport _magazine and request our March issue._]

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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