American Banker is reporting that HUD is planning on lifting the 1% cap on origination fees for FHA mortgages...
HUD says that competition will prevent fees from rising too much.
If borrowers think they're being overcharged, they can shop around for a better deal and take their business elsewhere.
Phillip Schulman, partner in the K&L Gates, LLP law firm told American Banker, "HUD feels the marketplace will drive origination fees down once the 1% cap is removed."
HUD had indicated last year that it might remove the cap when it completed RESPA changes for 2010.
It's doubtful that HUD would lift the cap on its FHA-insured reverse mortgages at this time, but that would be a welcome free market reform to that program.
Sincerely, your friend,
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