As you may have heard in various media reports, HUD issued Mortgagee Letter 2017-07 on Friday, January 20, rescinding the annual Mortgage Insurance Premium (MIP) cuts announced in Mortgagee Letter 2017-01. While there has been much news and opinion analysis on this story, the only effect on your daily business is the annual MIP will not change effective with closings on or after January 27.
The actual impact on the mortgage market is likely very minimal, with the most likely outcome being that some loans on which disclosures were sent to borrowers between January 10th and 20th – showing the reduced premium – will have to be re-disclosed. Before re-disclosing, I suggest doing a quick double-check to ensure that the change has been applied throughout the loan file, including the APR on the Loan Estimate. It remains to be seen whether the new administration will decide to move forward with any premium cuts in the months to come.