The order directs FHFA to expand title insurance waivers and launch a pilot for automated PMI cancellation
President Donald Trump signed a new executive order Thursday directing federal agencies to cut costs that have kept homeownership out of reach, with a specific focus on mortgage insurance, title insurance on refinances, and manufactured housing.
The order, titled “Decreasing Housing Costs for the American People,” is the latest in a series of housing-focused executive actions from the administration ahead of November’s midterm elections. It builds on a pair of orders signed in March covering regulatory barriers to construction and mortgage credit access.
Some in the industry who saw a draft of the order said provisions in it did not make the final version. Many industry groups were still pleased with what the order will do.
Bob Broeksmit, Mortgage Bankers Association (MBA) president and CEO, who has pushed for lower credit reporting costs, welcomed the order.
“MBA appreciates the Trump administration’s continued focus on lowering housing costs by reducing unnecessary regulatory burdens, streamlining mortgage processes, and promoting competition across the housing market,” Broeksmit said. “Our lender members welcome these latest initiatives to reduce the costs of refinancing and expand innovative manufactured housing options for potential homebuyers.”
What the order does
The order has four main parts. It sets up a pilot program for proactive cancellation of mortgage insurance using automated valuation models (AVMs), expands the title insurance waiver pilot on refinance transactions, creates a Task Force on Manufactured Housing Innovation, and directs the Departments of Agriculture and Veterans Affairs to reduce interest rates on their direct single-family loan programs.
The order tells the Federal Housing Finance Agency (FHFA) director to have Fannie Mae and Freddie Mac build a pilot that uses AVMs to periodically check current home values on loans they own and proactively cancel mortgage insurance when a borrower appears to have enough equity. Servicers would have to tell borrowers when cancellation may be on the table.
An existing pilot that lets lenders use automated title reviews on certain refinances instead of a title insurance policy would expand under the order. It directs the FHFA to raise the current 80% LTV ceiling for eligibility, bring in more providers, drop geographic limits, and waive appraisals and income re-verification for limited cash-out refinances that lower the borrower’s monthly payment, with any savings going to the borrower.
The National Association of Realtors (NAR) also backed the order. Shannon McGahn, NAR’s executive vice president and chief advocacy officer, said it takes aim at costs that make homeownership harder to sustain.
“President Trump’s latest Executive Order helps address the costs associated with homeownership and takes steps toward making homeownership more sustainable for American families,” McGahn said. “We appreciate the President’s continued focus on this critical issue and look forward to reviewing the Administration’s proposals in greater detail.”
What wasn’t in it
One item brokers had been watching for, a move to bi-merge credit checks, did not appear. FHFA director Bill Pulte had been expected to announce the change at the MBA Annual Convention in Chicago earlier this month, but he canceled his appearance, and speculation that it might surface in the order proved wrong.
Bi-merge has been one of the industry’s most closely watched pending changes, with trade groups including the MBA, the National Association of Mortgage Brokers (NAMB) and the Broker Action Coalition (BAC) pushing hard on credit reporting costs. For now, the tri-merge requirement remains in place.
The mortgage insurance provision drew criticism too. Some in the industry noted that the pilot applies only to mortgages made after the program launches, which means current homeowners paying mortgage insurance get nothing from it.
There is also concern that new borrowers could end up paying more, since mortgage insurance is priced based on how long insurers expect to collect premiums, and a pilot that cuts off late-life, low-risk loans gives mortgage insurers reason to build that into new originations.
Manufactured housing and direct loans
The order establishes a Task Force on Manufactured Housing Innovation, co-chaired by the Secretary of Housing and Urban Development and the FHFA director, with a 180-day deadline to submit recommendations to the President. The task force is directed to promote modern manufacturing methods, establish reciprocal recognition of certifications across federal programs, and cut requirements that slow automation and modularization in home production.
Factory-built homes have become an important piece of the affordability conversation as traditional market entry points dry up. The average price of a manufactured home was $123,300 last year, according to the Manufactured Housing Institute, compared to approximately $406,000 for a site-built home.
The order also directs the Secretaries of Agriculture and Veterans Affairs to reduce interest rates on their direct single-family loan programs, consistent with applicable law and available appropriations.
Broeksmit said the MBA plans to keep pushing for relief on borrowing costs.
“MBA will continue to identify and advocate for additional ways to help homebuyers navigate today’s higher interest rate environment and to work with the Administration and Congress to advance policies that deliver meaningful results for homeowners, homebuyers, and renters,” he said.
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