Elimination of FHA “Prepayment Penalty”
On May 7, 2014, President Steve Brown sent a letter to Federal Housing Commissioner Carol Galante strongly supporting the proposed rule to eliminate Federal Housing Administration (FHA) post-payment interest charges. NAR has has urged FHA and Ginnie Mae to remove this prepayment penalty for years. FHA’s antiquated policy has placed an unreasonable burden on FHA consumers who already face high housing and closing costs. The policy change would prohibit mortgagees from charging borrowers interest on their home mortgages after a principal balance pay-off. The proposed rule will align HUD policy with the Consumer Financial Protection Bureau’s Final Qualified Mortgage Rule.