Trump Order Targets Mortgage Insurance Costs for Homeowners

President Trump issued an executive order Thursday titled Decreasing Housing Costs for the American People. It tells the Federal Housing Finance Agency director, if he finds it in the best interest of the public and the mortgage giants, to have Fannie Mae and Freddie Mac set up a pilot program. The pilot would periodically review single-family loans made after it starts, using automated valuation models to find borrowers who appear to qualify for cancellation of mortgage insurance, the White House order says.

Under the order, the director would have the two enterprises set procedures for the pilot, including financial safety and soundness standards and payment-history requirements. Mortgage insurance would be canceled proactively when an enterprise determines the borrower meets the equity requirements based on the property's current market value, as measured by an automated valuation model or another method the director approves.

The order also directs the enterprises to require servicers, where the law allows and it is operationally feasible, to notify borrowers promptly when their mortgage insurance may be canceled under the pilot. Servicers would be expected to reduce or eliminate unnecessary documentation requests, appraisal costs and other administrative barriers to cancellation.

A second part of the order creates a Task Force on Manufactured Housing Innovation, co-chaired by the Secretary of Housing and Urban Development and the FHFA director. It includes the Secretaries of Agriculture, Commerce and Veterans Affairs. Within 180 days, the task force must send the President recommendations on using modern manufacturing methods for factory-built housing eligible for federal programs. It will also weigh whether federal grant money can be conditioned on state and local adoption of standardized permitting and licensing for such housing, and prepare legislative recommendations.

The order further allows the director, subject to the same best-interest finding and safety and soundness limits, to expand the enterprises' title acceptance pilot into an ongoing nationwide program. Under it, an enterprise could accept an FHFA-approved automated title review in place of a lender's title insurance policy on eligible refinance transactions. The FHFA will bear the costs of publishing the order.