MBA’s President and CEO Bob Broeksmit, CMB, issued the following statement on the Department of Housing and Urban Development’s (HUD) final rule on the acceptance of private flood insurance for Federal Housing Administration-insured (FHA) mortgages:
“MBA applauds HUD’s decision to permit lenders to accept private flood insurance policies, a move for which we have long advocated and that will give FHA borrowers who need flood insurance more choices and potentially better coverage at a lower cost.
“The increasing threat of flood damage in many areas poses a significant risk to both homeowners and the FHA program. Accepting private flood insurance shifts some of the risk to the private market, ultimately helping to protect FHA’s Mutual Mortgage Insurance Fund.
“Although the final rule is a win for FHA borrowers, there is some concern that the lack of complete alignment with federal flood insurance requirements may lead to the rejection of some flood policies on FHA loans that are acceptable for other federally-backed loans.
“MBA will continue to work with HUD on improvements to housing policies and regulations that benefit borrowers while maintaining the safety and soundness of the FHA program.”